Banks are unlikely to undertake major hikes in deposit rates: Expert

With the reduction in statutory liquidity ratio and open market operation bond purchases, RBI is pushing liquidity into the system

Shreepad S Aute  |  Mumbai 

Pick-up in credit growth is definitely a positive for banks. According to the Reserve Bank of India’s (RBI’s) data, as of December 21, the loan book of all scheduled banks rose 15 per cent year-on-year.

But on the flip side, credit-to-deposit ratio touched its highest level of 79 per cent in December 2018, amid slower growth in deposits (9 per cent). Does this indicate a challenging situation for banks in the near term amid an expected rise in deposit rates, which would weigh on their profitability? Probably, not. ALSO READ: United Bank of India hikes ...

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First Published: Mon, January 07 2019. 23:23 IST