“If you look at bond yields, they have gone up in the recent past,” Kumar said on the sidelines of an event in Delhi on Thursday.
“So, I think headroom available for cutting down interest rates, both deposit and lending (seems limited). Deposit rate unless you cut, you cannot cut lending rate-...for the time being, we are in for much more stable interest rate,” he said.
Last week, SBI reduced its lending rate for home and auto loans by 0.05 percentage points. When asked if recapitalisation of public sector banks could lead to increase in interest rate, Kumar said it is quite possible.
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