Mumbai: Ahead of the quarterly monetary policy late this month, bankers on Thursday told the RBI that they may not achieve the 18 per cent loan growth target for FY10, besides asking a reduction in savings deposit rates and relaxation in infrastructure lending norms.
Bankers have demanded the apex bank to lower the interest rates being paid to customers on the savings deposits in the backdrop of April 2010 deadline to implement the RBI directive requiring them to calculate savings a/c rates on a daily basis.
>"Bankers feel that this would considerably increase their cost of funds. They either want the interest rates (on savings deposits) to be lowered or the status-quo to continue," Indian Bank's Association Chief Executive K Ramakrishnan told PTI.
Presently, banks calculate savings a/c rates from the tenth to the last day of the month, which results in their interest costs below 3.5 per cent.
Given the slow credit offtake in the industry, Bankers also told the apex bank that the set credit target of 18 per cent for FY10 may not be achievable, though a slight pick up in the credit offtake is visible.
"Banks feel that the 18 per cent target may not be achieved in FY10 and the credit growth, on an average, for the full fiscal may be around 15 per cent," Ramakrishnan said. Bankers, who met the four Deputy Governors of RBI in the meeting, include SBI Chairman O P Bhatt, Union Bank CMD M V Nair, Bank of Baroda CMD, M D Mallya, ICICI Bank MD & CEO, Chanda Kochhar and StanChart Country Head Neeraj Swaroop amongst others.
Banks are also not in favor of a hike in CRR, the amount they have to keep with the apex bank, or in policy rates in the immediate future as they feel that the current surplus liquidity is slowly drying up from the system in line with a pick up in credit offtake.
They also wanted relaxation in infrastructure lending norms from the central bank including permitting them to issue tax-free bonds with exemption from CRR, SLR requirements. This will help banks to raise medium-term funds.
Besides, the 70 per cent loan loss coverage ratio requirement, which all banks have to comply by September of this year also came under discussion in today's meeting. Banks asked for further easing in the norms pertaining to this.
PTI
First Published: Thursday, January 14, 2010, 21:25