ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Lending RatesSubscribe to Lending Rates

Realistic Interest Rates Structure

Considering the need for stimulating domestic savings through a strengthened system of banks and other financial institutions, the present structure of bank deposit and lending rates is generally realistic. The average cost of capital cannot be reduced further without hurting the development process.

Little Scope for Lower Lending Rates

While commercial bank lending rates were undoubtedly high till March 1999, the scope for any significant reduction in them below their current levels is small as banks' margins have been squeezed by their cost of funds, transaction costs and burden of nonperforming assets as also by non-bank competition.
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