Mumbai, Nov. 3: Bank chiefs today welcomed the busy season monetary and credit policy for 2003-04.
While the Reserve Bank left key interest rates, including the bank rate, untouched, Central Bank of India announced its intention to cut the prime lending rate by 0.5 per cent.
Central Bank of India chairman and managing director Dalbir Singh told newspersons that the bank is to cut its PLR by 0.5 per cent to 11 per cent.
State Bank of India chairman A. K. Purwar said the review signals continuity of interest rate policy and the bank would review their interest rates in the light of mid-term review.
On the compulsory hedging of foreign currency loans above $10 million, except for export finance and loans for meeting forex expenditure, he said this would help contain volatility in the forex market.
The policy also reaffirms the need for deciding single PLR in consultation with IBA for better transparency and improving credit delivery to different sectors of the economy.
The RBI governor has pulled off a fine balancing act between the competing demands of different segments and user groups, while at the same time initiating measures for improving credit flow to agriculture and SSI sector, he added.
Corporation Bank chairman and managing director Cherian Varghese said the policy signals a minor adjustment in interest rates.
Kotak Mahindra Bank vice-chairman Uday Kotak said: “Reddy has left everything unchanged as it should be. The governor has reminded us that we need to moderate our expectations because growth is here to stay and inflation can rear its head when one is not looking.”
Syndicate Bank chairman and managing director Michael Bastian said any change in lending rate has an implication for the balance sheet and “we will have to rework the entire rate structure”.