Jaipur: Punjab National Bank today said it
expects to achieve 18 per cent credit growth, in line with the
RBI's projection, in the current financial year despite tepid
demand from the farm sector.
"The slow growth in agriculture is because of drought in
the country and the cheaper alternative sources of capital
have resulted in subdued credit growth. But we are confident
of securing 18 per cent growth during this fiscal," PNB
chairman and managing director K R Kamath said.
The industry's loan offtake remains at around 10.5 per
cent so far, way below the Reserve Bank of India's projection
of 17-18 per cent for this fiscal.
"The low interest rate regime in many of the developed
countries have made raising overseas loans attractive which is
one of the key reasons for the decelerated credit growth of
the banking sector," Kamath added.
On interest rates, he said, "There would be no
significant pressure on banks if reverse repo or repo rates
are raised. These instruments are indicative in nature.
However, if cash reserve ratio is revised upward, there would
be impact on banks to raise interest rates. But there is
enough liquidity in the system, which may cushion the CRR
impact to some degree."
Repo rate is the interest rate at which the RBI lends
money to banks. Reverse repo rate is return banks earn on
funds parked with the RBI.
-PTI
First Published: Monday, December 28, 2009, 23:22