In last 20 months FDR rates have fallen by 2%. This made FDR unattractive investment option. Due to this reason growth rate of deposits has fallen to 11% yoy. normally growth rate is 15% p.a.
This lower growth has put pressure on banks, so despite 1.25% cut in REPO rate by banks, short term rates have not moved down.
RBI must raise interest rates to protect banks.
This lower growth has put pressure on banks, so despite 1.25% cut in REPO rate by banks, short term rates have not moved down.
RBI must raise interest rates to protect banks.
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