Subbarao, bankers discuss credit growth, interest rate hikes

MUMBAI: Ahead of its second monetary policy review that is on October 27, Reserve Bank Governor D Subbarao on Monday disscussed with bankers credit growth, interest rate hikes and inflation.

State Bank of India Chairman and Managing Director O P Bhatt, ICICI Bank Managing Director and Chief Executive Chanda Kochhar, Standard Chartered Plc Chief Neeraj Swaroop, IDBI Bank CMD Yogesh Agarwal and HDFC Bank's chief Aditya Puri, were among those who attended the meeting at RBI headquarters here.

"Reserve Bank Governor wanted some discussion on what he should consider in the monetary policy...for example on what policy prescription was required to spur credit growth," IDBI Bank Chairman and Managing Director Yogesh Agarwal told reporters after the meeting.

The chiefs of various bank expressed their views on credit growth and raising the limit of bonds under the HTM (held-to-maturity) category, Agarwal said.

"My view was that the RBI expectation of 19-20 per cent credit growth will materialise by the year-end," he said.

Despite infaltionary pressure due to high food prices, RBI is likey to reatin interest rates as economic recovery is fledging.

Bankers generally opined that there was enough liquidity in the system and interest rates could possibly rise post-Diwali after surplus liquidity was mopped up, he said.