We Need To Curb Interest Rates: ICICI Bank

Author: Pushpak Srivastava

In the current phase of financial crisis that is heating up the world’s greatest economies, the Reserve Bank of India and the government have come up with various set of measures to infuse liquidity in the Indian financial system in the last few days. RBI also made a further 1 percent reduction in the mandatory CRR to release another Rs 40,000 crore in the banking sector.

The Finance Minister P Chidambaram has also made an announcement regarding the immediate funding of Rs 25,000 crore under the farm debt waiver scheme to lending institutions.

The Foreign Institutional Limit (FII) in corporate bonds has also been raised from $3 billion to $6 billion.
	According to Joint Managing Director and CFO of ICICI Bank, Chanda Kochhar, the banks are required to bring down the interest rates in order to initiate some more growth and improvement in the economy. The economy is presently growing at a rate of 7 to 7.5 percent but it is not a bad rate at all considering the current scenario. The growth rate of the country is much better than that of some other countries around the globe. In order to persisting with the current momentum it is important to insert more liquidity in the system, and for this, with other liquidity measures, reduction in interest rates is also vital.