Central Bank of India unlikely to raise rates: Media Report

Central Bank of India unlikely to raise rates: Media Report
Government-owned, Central Bank of India is not willing to increase its lending rate following RBI's liquidity tightening measures, despite rise in cost of funds, said the media report. The pressure on the cost of funds has been originated with the RBI's liquidity tightening moves starting July 15 aimed at curbing speculation in the forex markets, said the media report.

"In the last two months, you have definitely seen an escalation in the cost of funds. Absolutely! No two opinions on that. But whether it is going to result in a change of base rate...I don't think so, as of now. But if we need to do something about it, we'll have an Alco (asset liability committee) meet," Central Bank of India, Chairman and Managing Director Rajiv Rishi, told media.

CBI with a base rate of 10.25 per cent said that the bank may think of raising the base rate or the minimum rate of lending as and when a need arises.

Moreover, the moves, which include a cap on the bank's overnight borrowing, have pushed up rates in the money markets. Most top private sector banks have increased their base rates as well as deposit rates.

Dion Global Solutions Ltd.

Story first published: Friday, September 13, 2013, 9:10 [IST]
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