Ahead of the Reserve Bank of India's credit policy review amid surging inflation, leading private bank ICICI Bank on Wednesday foresaw no immediate increase in interest rates.
"We have to find a balanced path -- right balance between controlling some of the challenges that may come (and) at the same time (ensuring that) growth momentum does not get diluted," ICICI Bank CEO and managing director Chanda Kochhar told PTI.
She, however, felt that interest rates, which are at present ruling at the lowest in about five years, could go up a bit over a year's time.
"No I am not subscribing to any single view," Kochhar, who arrived at this Swiss resort town to participate in the World Economic Forum meeting, said when asked whether she subscribed to the finance ministry's view that inflation in India was segmented and limited to food sector or the RBI's concern over inflationary pressures.
The finance ministry has voiced the opinion that there was no need for the RBI to increase the key rates that could impact the banks lending rates.
The Reserve Bank of India is slated to announce the quarterly review of the monetary policy on January 29 and its task is cut out ensure adequate credit to the industry and arrest inflation.
Though she felt that cost of money was not high in India, Kochhar said that 'over one years time, interest rates could go (up) a little bit, but I am not seeing any immediate increase in this financial year'.
The efforts to contain inflation by the central bank should not be 'at the cost of allowing growth momentum to come down', Kochhar said, adding, "We have done that nicely in the past one year (and) that is how we should move. We can't swim to either of the two extremes".
As regards interest rate outlook for the next fiscal, she said the rates could go up gradually with likely pick up in demand for credit by the industry.
She, however, added, "I don't think there is going to be any knee-jerk increase or a very sharp increase that would . . . disrupt the growth momentum".
Food inflation soared to more than a decade's high at near 20 per cent in December raising expectations that RBI could tighten monetary policy to contain price rise.
The overall wholesale-prices based inflation too rose from sub-zero level mid-last year to 7.31 per cent in December and is expected to cross nine per cent by the end of March.
