ICICI to watch liquidity before deciding on rate cuts

India's second largest lender, ICICI Bank, today played its cards close to the chest on lending rate cuts and said it would assess the liquidity conditions in the next few days before taking a call.  
      
"Interest rates won't go down in isolation. Funding costs should come down before we can think of reducing interest rates... with the steps (by RBI and Government) taken, the interest rates will clearly start declining...we have a few days to watch our liquidity situation (before deciding on a rate cut)," ICICI Bank's Managing Director and CEO, K V Kamath, told reporters here.        

The financial crisis in the domestic market was not as severe as in other global markets and policy makers were always willing to take adequate measures as the situation demanded, Kamath said. 
  
"There is a readiness to interact with any bank and intervene at any time as required...the challenge in India is not as severe as what it is around the world," he said.        

The banking regulator has kept a close watch on the liquidity conditions in the system on a continuous basis and might act again if conditions remain uneasy, Kamath said.        

"The RBI and Government have said that the liquidity situation will be monitored on a continuous basis. If further liquidity is needed or if interest rates are not coming down, further steps will be taken," Kamath said on the sidelines of a CII-organised seminar.