Monday, May 02,
The Reserve Bank of India is expected to hike rates by 25 basis points in its credit policy which will be announced on Tuesday.*
According to chief Indian economist at Bank of America Merrill Lynch, Indranil Sengupta “We expect RBI to raise rates by 100 basis points by October 2011, with a 25 bps hike on Tuesday. Also, the bank could tighten provisioning norms for bank loans to real estate.
Kotak Mahindra Bank’s group head-wholesale banking Shanti Ekambaram too feels that the central bank would up rates by 25 basis points and not 50. “We expect a steady progression of 25 bps with 75-100 bps till December or maybe even up to March,” he said.
Rate hike, whether it is 25 or 50 basis points, will be passed on to customers, according to Canara Bank’s chairman and managing director S Raman. “The hike will translate to lending rate hikes,” he added.
Source: Moneycontrol
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