Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 1.0
Article rating: No rating
RSS

News

Cost of credit, NPA positioning restricting banks to cut MCLR: SBI

Author: IANS/Thursday, August 3, 2017/Categories: Banking & Financial Services

Cost of credit, NPA positioning restricting banks to cut MCLR: SBI

Mumbai, Aug 3 - The SBI said that though the Marginal Cost of Funds-based Lending Rate (MCLR) is expected to be in tandem with the policy rates, banks are hesitant to reduce it due to cost of credit and deposits and NPAs positioning.

The Reserve Bank of India (RBI) has cut the key lending rates by 25 basis points (bps). "As far as the MCLR is concerned, it is a function of multiple components. It is intended that the MCLR is in tandem with policy rates," State Bank of India (SBI) Managing Director and Chief Executive Officer Dinesh Khara said.

"But other factors like the cost of deposit and cost of credit -- which are a critical determinant of MCLR -- and also non-performing assets (NPAs) positioning, are restricting banks from cutting the MCLR... the policy rates are a critical component but not the only component affecting the MCLR," he said.

The banking system is rolling into a lot of liquidity and they would like to deploy that liquidity into the right kind of investments and projects coming up for consuming this kind of liquidity, Khara said.

The advances growth in general is 6% in the current fiscal while the retail advances are doing well at 10-12%.

Retail advances are still linked to base rate while the corporate advances are getting aligned to the MCLR. 

"Banks are willing to lend at the right kind of price. But when it comes to investment demand from corporates, that is yet to be seen. My sense is that economic activity through private investment gets revived," he said.

Print Rate this article:
No rating

Number of views (255)/Comments (0)

S Vijaykrishnan
S Vijaykrishnan

IANS

Other posts by IANS
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free