Amidst ample liquidity, bankers do not see interest rates moving up and State Bank of India chairman O P Bhatt expects the cost to even fall in the next few months.
"In the next 4-6 months, I do not see interest rates going up. Either they will remain stable or may even drop," Bhatt told reporters in New Delhi after receiving the award from Prime Minister Manmohan Singh for excellence in financing small and medium enterprises.
Bhatt said there is enough liquidity in the banking system, so much so that different banks are offering "all kinds of schemes on specific kinds of products, which are very competitive".
While inflation has stayed in the negative territory for past several weeks, analysts are wondering whether the interest rates have bottomed out with signs of economic recovery. The Reserve Bank left the benchmark rates unchanged in its July credit policy.
Central Bank of India chairman and managing director S Sridhar also does not see any upward movement in the interest rates in the festival season. "In the short-term, interest rates would depend on liquidity, which was enough in the system," Sridhar said.
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