Interest-rate cut won't affect profitability: ICICI
ICICI Bank Ltd said Friday the lender's decision to cut its base interest rate by a quarter percentage point won't affect its profitability.
Mumbai: ICICI Bank Ltd said Friday the lender's decision to cut its base interest rate by a quarter percentage point won't affect its profitability.
"We believe that we'll not see a cut in margins on account of this," Chief Executive Chanda Kochhar said on a television channel, citing the bank's decision to cut deposit rates as well.
ICICI Bank Thursday said it will reduce its base rate--the minimum benchmark interest rate below which banks can't lend--to 9.75 percent with effect Monday. The step came after the central bank Tuesday cut its benchmark lending rate by half a percentage point.
The rate cut by ICICI, India's largest private-sector bank by assets, may prompt its peers to review their interest rate strategy, analysts said.
While HDFC Bank Ltd. has yet to take a call, State Bank of India Chairman Pratip Chaudhuri ruled out an across-the-board reduction in lending rates after the policy announcement.
"It (a rate reduction) will particularly be for the segment where the mark up above the base rate is significantly higher," Chaudhuri said.
The base rate of HDFC Bank and SBI is 10 percent at present.