Country's second largest private sector lender
HDFC Bank on Tuesday said it will decide on a possible interest rate cut later this week.
"When costs go down, interest rates will go down. That (a rate cut) the Alco (asset liability committee) will decide now," Managing Director and Chief Executive Aditya Puri said, adding that the Alco will meet "by the end of the month".
He said the bank is saving 0.06 per cent as a result of the recent cut in the
cash reserve ratio (CRR), which is the amount of deposits banks have to pass with RBI, while there is also additional relief coming in from the 0.5 per cent cut in deposit rates announced recently by the bank.
Signaling a lower interest rate regime, the largest lender State Bank of India last week announced a 0.25 per cent reduction in its base rate or on the minimum rate of lending on the back of cuts in the CRR and statutory liquidity ratio (SLR) or the amount of deposits to be held in G-secs, by the RBI early this month and late July, respectively.
Unlike SBI, which is sitting on an excess SLR of Rs 50,000 crore, Puri said HDFC Bank does not have any additional SLR holding.
Replying to a question on the margins, he said the bank continues to stick to its projection of 4 per cent to 4.2 per cent.
HDFC Bank's credit growth is on track, courtesy good demand from retail and working capital segments, Puri said, but added that there are difficulties in demand from the infrastructure and the capital goods sectors.
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