ICICI alone cannot keep interest rate high: Avinash Gupta

Avinash Gupta, Assistant Vice President Research Equity, Bonanza Portfolio Limited

Do you think the rate hike from ICICI Bank will trigger off something in the banking space?

I don’t know what would be the rates of ICICI compared to other banks in this particular time category but the fact is that ICICI Bank has raised the rates. The bank is in need of longer term money. It is not nearly a CRR hike. To meet the 15 day requirements of CRR requirement immediately. Therefore, the bank is going to see a longer term traction.

Two things can happen either the other banks would also align the rate of interest in line with ICICI Bank and therefore there could be increase in rates as the credit demand picks up in the economy. ICICI alone cannot keep their interest rate high. Others will not follow or vice versa or ICICI will fall back. This looks somewhat positive for ICICI Bank.