Interest rate environment in India is softening, says ICICI Bank CEO Chanda Kochhar
New Delhi, Aug 18: With inflation under control, lending rates will gradually come down as India is moving towards softer interest rate environment, said Chanda Kochhar CEO of the largest private sector lender ICICI Bank on Tuesday.
ICICI Bank was the first lender to start cutting base lending rates, she said adding "a lot of transmission" of monetary easing to borrowers has already happened.
"Specifically about our rates we were the first bank to actually start cut in base rates and clearly a lot of transmission has happened because if you see when the monetary policy rates gets cut then the deposit rates fall and the deposit form a only part of cost of funds for the banks," she further added.
The Reserve Bank of India has cut its benchmark rate by 75 basis points to 7.5 per cent in three tranches so far this year. At the bi-monthly monetary policy earlier this month, RBI Governor Raghuram Rajan wanted banks to transmit more interest rate cuts to borrowers before he further eases monetary stance.
"So, given that I think 30 base rate cut has already happened which is quite in line with the reduction in the cost of funds. Not only we were the first ones to cut rates we had actually cut them by a much larger amount than any other bank.
I think, gradually as a cost of funds keep going down you would see interest rates coming down. Directionally definitely we are in a softening environment but when and how much that's not something we can say," she said.