Kamath sees rates stable in medium term

Interest rates will remain stable in the medium term, according to K V Kamath, managing director and CEO, ICICI Bank. "Inflation is under control and liquidity in the system is good," and, hence, there is no pressure on banks to increase rates, Kamath told reporters on the sidelines of a seminar.

About the high incremental credit-deposit ratio, Kamath said the overall credit-deposit ratio was not very high and, thereby, there is not much of pressure for resources mobilisation. Credit-deposit ratio as on October 28, 2005 was 67.20 per cent.

He said the bank would not increase interest rates on repatriable non-resident external (NRE) rupee deposits just because the Reserve Bank of India (RBI) has raised the ceiling. "We will take a decision based on market trends," he added.

On the no-frills accounts banks have been asked to offer, he said ICICI Bank's accounts for ensuring financial inclusion will be based on the use of technology-driven channels.

Meanwhile, Dena Bank today announced a 25 basis points hike in interest rates on deposits of maturity periods of over six months.

The bank said the interest on deposits with maturity of 180 days to less than a year has been increased to 5.75 per cent, for 1 year to less than 2 years 6.00 per cent, three years to less than five years and above five years 6.25 per cent. The bank has retained the interest on deposits of 2 years to less than 3 years at 6 per cent.