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Lending rates will move up over next year: Kochhar

New Delhi, July 19 (IANS) Loans will gradually become costlier over the next year with demand for credit increasing substantially in the second part of the fiscal, India’s largest private lender, ICICI Bank, said Monday.

‘The demand for liquidity will increase substantially in the second half of this year as the credit offtake picks up for projects. So, you would see some gradual increase in interest rates on the lending side over the next one year,’ Chief Executive Chanda Kochhar told reporters at the sidelines of a seminar here.

The Reserve Bank of India, which made a mid-cycle upward revision of the repo rate by 25 basis points to 5.5 percent and the reverse repo rate by a similar quantum to 4 percent July 2, will meet on July 27 for the first quarterly review of the monetary policy.

The July 2 decision has not resulted in a hike in lending rates by banks, and according to the RBI it was taken to control overall inflation and return to a more normal monetary policy.

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