K V Kamath, managing director and CEO, ICICI Bank, today said there is a need for correction in interest rates to improve credit offtake despite excess liquidity in the system."I would still maintain interest rates need to correct though there is excess liquidity in the system. I believe the rates will tend to probably correct downwards despite strong domestic liquidity flows," Kamath told reporters on the sidelines of a CII quality summit here today. Foreign fund inflows will continue to add to liquidity, Kamath said, and added that the RBI's measure to hike CRR by 0.5% in the latest credit policy will not solve the problem of excess liquidity. "As long as the fundamentals are good, funds will continue to flow," he said. On interest rates, Kamat said it is too early to take a call. "Let us wait and see. There is a hike in CRR, but I am not hearing any banker talk of increasing rates. Banks and other financial services intermediaries are cautious as high interest rates signal inflationary tendencies. The banks are yet to find equilibrium to take a call on the rates," Kamath said.Earlier, delivering the keynote address on the challenges faced by Indian industries today, Kamath said the challenge relating to human capital is far greater than the financial challenges and technological challenges the country is facing today. "We must leverage existing talent, enable entrepreneurship along with improving operational success. By the next decade, India will have the youngest workforce in the 22-45 age bracket as opposed to other countries. India needs to gear up to address the skill set needs of this talent pool." Narrating the example of how ICICI Bank transformed itself from a single product bank to a multi-services organisation in the last decade, Kamath said the next step forward for the bank is to penetrate deeper into the rural markets in the next decade. By using technology, the bank aims to design new products suitable for the rural masses, he added.
