The current market situation signals stable interest rate regime said K V Kamath, managing director and CEO, ICICI Bank. |
"The Reserve Bank of India (RBI) in its mid-term policy has indicated stable interest rates and there are no contrary signals from the market," said Kamath on the sidelines of an Indian Banks' Association (IBA) function here last night. He refused to make any guess on the interest rate stance of third quarterly review by the RBI, due next month. |
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The RBI had left key interest rates intact in its mid term review, barring reverse repo rate which was raised to 25 basis points to 5.25 per cent and repo rate which was increased to 6.25 per cent. |
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When asked whether ICICI Bank was planning to reduce its equity stake in asset reconstruction company, Arcil, he said, "we will decide in a due course." |
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ICICI Bank has 29.58 per cent stake in Arcil with SBI and IDBI owning 19.95 per cent each and the remaining spread between Punjab National Bank, Karur Vysya, Karnataka Bank, Citicorp Finance and others. |
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He said after urban retail and corporate customers, it is now the turn of rural counterparts to ask for better services from banks. He said ICICI bank expected up to 25 per cent of the revenues to come from the rural sector in the next few years. The bank will start rolling products for rural market in two years, he added. |
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ICICI Bank expects rural sector to account for 25 per cent of its balance sheet over next few years. Besides retail and corporate segments, rural customers will drive growth in the banking sector and create business opportunities, Kamath said. |
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Kamath said rural customers cannot be considered just as a target for deposits. They would seek credit products and services which are available for urban counterparts. |
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ICICI Bank will open branches in places where agricultural markets are located as part of our expansion plan. |
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The rural branches would be targeting farm credit and would evolve products to encourage savings and investment among the farmers besides selling the bank's insurance products. |
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The credit growth has been over 20 per cent and banking sector will have to learn to live with accelerated growth. Robust opportunities would create challenges, Kamath said. |
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