Monday, 2 January 2017

Indian banks aim to boost credit growth with sharp rate cuts

For Equity and Commodity Market Trading view as :

Indian banks, led by market leader State Bank of India, announced sharp cuts to their lending rates after a recent surge in deposits, raising hopes that lower borrowing costs will help spark credit growth in Asia's third-largest economy. SBI, the country's biggest lender by assets, said on Sunday it had cut its so-called marginal cost of funds-based lending rates (MCLR) by 90 basis points, while unveiling new products for mortgage loans, one of the fastest-growing areas.

Several other lenders including Punjab National Bank, Union Bank of India, Kotak Mahindra Bank and Dena Bank also cut their lending rates by 45-90 basis points across tenures. Analysts expect more lenders to follow suit.

Banks have received an estimated 14.9 trillion rupees ($219.30 billion) in old 500, and 1,000 rupees notes from depositors since Prime Minister Narendra Modi's government on Nov. 8 unexpectedly banned the banknotes in a bid to fight counterfeiting and bring unaccounted cash to the economy.

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