The Hindu Business Line : Interest rates to soften further: O.P. Bhatt

Guwahati, Jan. 2 Interest rates will soften further and there will be a gradual pick-up in credit offtake, according to Mr O.P. Bhatt, Chairman, State Bank of India. “There is a southward bias on interest rates, they have been coming down. This southward movement of interest rates is here to stay,” he said.

Briefing newspersons after the inauguration of the 11,111th branch in Sonapur, 30 km from Guwahati on Friday, Mr Bhatt said,“Credit offtake in the months of October, November and December has not been so good inspite of being the busy season. However, now with the interest rates coming down we can expect a gradual pick up in demand,” he said.

Deposit rates should also come down in synch with the inflation and cost of funds, he observed. The comprehensive package on home loans announced early last month has not picked up well so far, he pointed put. “This is primarily because the package was announced quite late and people need time to make a purchasing decision. Moreover, in India people consider the period post-Sankranthi (middle of January) as more auspicious for such purchases,” he said.

According to Mr Bhatt, developers are hoping to see a spurt in home loan demand from mid January.

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