Finance Minister P Chidambaram on Friday said interest rates will moderate from the current high levels over the next six months.
“These interest rates will not remain high forever. We will get out of the trough and we will go back to moderate to normal rates, hopefully in about six months to a year. In the meanwhile, we have an opportunity to mitigate the burden of high interest rates by reducing the cost of money so that banks are not obliged to raise interest rates, every time the monetary policy is tweaked,” he said.
Speaking after inaugurating the 1,000th branch of Corporation Bank here on Friday, the finance minister said banks can mititgate the burden of high interest rates on borrowers by taking certain measures like mobilising more low-cost deposits and increasing business by employing business correspondents, branchless banking and reaching out through new models and new ways.
Meanwhile,Union Bank of India , Bank of India , Standard Chartered Bank, Indian Bank and Corporation Bank cheifs said they were mulling to raise interest rates. Allahabad Bank, on Friday revised its interest rates on FCNR deposits.
