A recent press report said that the Chairman and Managing Director, Canara Bank, Mr. S. Raman, said that RBI has to do a balancing act between curtailing inflation and growth. He said that the bank is planning to raise its interest rates as soon as possible. The bank is into providing many a variety of loans including home loan, car loan, personal loan etc.
The Chairman and Managing Director, Vijaya Bank, Mr. H.S. Upendra Kamath, told that the move by the Reserve Bank of was expected with the rising inflation.
Spread on Government bonds flat
Mr. V. Rama Gopal, the Executive Director, Indian Bank, told the press that the spread on governments bonds have been flat. He stated that the ten-year government securities are going at a rate of 8.30 per cent while one-year treasury bills are at 8.34 per cent.
He also said that the market has already factored in 25 basis points hike and the bank has planned to take a decision on raising rates only after monitoring the impact of the hike.
The hike in interest rates has increased the burden of the existing borrowers and also the new borrowers, irrespective of the kind of loan borrowed.