New Delhi: Interest rates are expected to remain stable till March 2010 as Reserve Bank has left key policy rates unchanged, bankers said after meeting with Finance Minister Pranab Mukherjee here.

“Interest rates should be stable up to March,” Punjab National Bank Chairman and Managing Director K R Kamath told reporters. Oriental Bank of Commerce CMD T Y Prabhu, too, said, “I do not see any change in the interest rates till March.”

However, National Housing Bank Chairman and Managing Director S Sridhar said that cost of advances to the real estate companies would go up as the Reserve Bank has increased provisioning.

In its quarterly monetary review, RBI yesterday said real estate prices, after showing some corrections in the later part of 2008 and early part of 2009, have risen significantly in major cities.

To prevent any non-performing assets (NPAs) in the commercial real estate market, the apex bank raised provisioning requirement for banks from 0.40 per cent to 1 per cent for commercial realty.

Although RBI raised the Statutory Liquidity Ratio (SLR) by one percentage point to 25 per cent, it refrained from tinkering with other key policy ratios and rates like Cash Reserve Ratio, repo and reverse repo rates.

Referring to the meeting with the Finance Minister, Kamath said Mukherjee reviewed the financial performance of the PSU banks and financial institutions.

The meeting also took note of low credit flow to the productive sectors and focussed on agriculture credit, infrastructure lending, housing and education loans, he added.

Source: http://www.zeenews.com

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