ICICI Bank said on Tuesday it does not expect a slowdown in credit growth following the hike of 0.25 per cent in overnight rates by the Reserve Bank of India.
"We expect the credit growth to be up 25 per cent as the consumer credit demand continues while the corporates are in the investment phase," bank Joint Managing Director Kalpana Morparia told reporters.
Earlier in the day, RBI hiked the reverse repo rates by 0.25 per cent from 5.75 per cent to 6 per cent and accordingly aligning the repo rate at 7 per cent.
The repo rate is the rate at which the apex bank lends to the banks in short-term to infuse liquidity in the system while the reverse repo is the short-term rate at which it borrows from the banks to suck out excess liquidity from the system. KM
Though Morparia agreed the signals were that interest rates could move up further, ICICI Bank would revise rates only if there was a pressure on its cost of funds.
"We have to watch how the hike of 0.25 per cent feeds into the cost of funds before we revise the interest rates," she said.
On the policy, she maintained that apex bank has always followed a caliberated approach and the impacts had always been gradual.
Asked on the RBI caution on credit growth, the Joint MD felt that in the scenario of growing credit demand, concerns of quality of credit were always there.
However, she said, the RBI has ensured "appropriate liquidity" would be maintained in the system so that all legitimate requirements of credit are met.
Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
More from rediff