Considering the unabated inflation, the interest rate increase was on expected lines. Much has been discussed on the impact of this on the bottom lines of corporates and our view on this is no different, Growth has been scaled downwards, of course the increase not being the only reason. Of course, there is a possibility that banks may not pass on this increase considering the sluggish growth and credit offtake, but one is not too sure.
We do fervently hope that this is end of the rate hike cycle and adequate steps are taken to address the supply side issues rather than the monetary measures
The increase in interest rate on savings bank also would impact the margins of the banks and this too may be passed on to the borrowers.
V Ashok
Group Chief Financial Officer, Essar Group
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