Stable interest rates: IBA report to RBI

In a report submitted by the Indian Bankers Association (IBA) to RBI deputy governor Rakesh Mohan, bankers expect interest rates to remain stable. Bankers are of the opinion that there is enough liquidity in the market.

The bankers also expect moderate credit growth for 2007-08, with an expectation of achieving a credit growth of 20-22 per cent during the year as against close to 30 per cent in the last three financial years.

The central bank had placed the credit growth, excluding food credit, at 24-25 per cent during 2007-08, a deceleration from a compounded 29.8 per cent growth over the preceding three years. 

At the end of December 2007, credit growth stood at 21.4 per cent over a year earlier. Banks had added Rs 2, 19,180 crore of advances to their loan book during April-December 2007 as against Rs 2, 62,938 crore a year earlier.  

Finance Minister Mr. P. Chidambaram had advised public sector bank chairmen to lower both deposit and lending rates by 50 basis points and step up consumer finance so that the target of growth of economy 9 per cent can be achieved.