ICICI Bank's managing director and CEO Chanda Kochhar on Friday ruled out an immediate hike in lending rates after Reserve Bank of India announced measures to squeeze money.
"I do not see any immediate impact on interest rates. There is so much liquidity (in the system). . .government borrowing is almost over and whatever is there, is there for investment," Kochhar told PTI on the sidelines of World Economic Forum meet in Davos.
The RBI, in its third quarter monetary policy review, raised by 75 basis points (to 5.75 per cent) the mandatory deposits banks need to park with the apex bank to tame inflation. The move is likely to suck Rs 36,000 crore (Rs 360 billion) out from the system.
Kochhar said the RBI's move is a good effort to maintain a balance between growth momentum and managing certain challenges like inflation.
"We have to manage the supply side and create capacity for a longer term solution and as the capacity gets created you get an opportunity for investment," she said.
The RBI has kept the shor-term lending and borrowing rates unchanged at 3.25 per cent and 4.75 per cent respectively.
Image: Chanda Kochhar
