Banks expect stable interest rates for next six months

Indian banks,including the largest lender State Bank of India (SBI),expect interest rates to remain stable in the next six months with liquidity worries vanishing following the following the Reserve Bank of Indias (RBI) assurance of maintaining a comfortable liquidity while managing the large-market borrowing programme of the government.

Interest rates are expected to remain stable in the next 4-6 months. There is enough liquidity in the system as shown by so many new and competitive products being offered by various banks, SBI chairman OP Bhatt told reporters on the sidelines of a conference here.

In the monetary policy review last month,the central bank had also left key policy rate unchanged. Central Bank of India chairman and managing director (CMD) S Sridhar said it was unlikely that any upward movement of interest rates would take place in the festival season. In the short-term,interest rates would depend on liquidity,which was enough in the system, he said. Union Bank of Indias (UBI) CMD MV Nair said banks were concentrating on increasing demand for loans and not revising the interest rates.