New Delhi: Several banks on Monday feared that commercial real estates and personal loans may cost more in the near future following the directive from Union Finance Minister P Chidambaram to rebalance their credit portfolio for channelising advances to productive sectors.
Loan rates may harden for the commercial real estate sector, Vijaya Bank Chairman P P Mallya said on the sidelines of a PSU Bank Chairmen meeting with Chidambaram to take stock of the situation arising out of RBI's decision to hike the repo rate by 0.25 per cent in its busy season credit policy.
"Real estate carries higher risks. To the extent that credit will be channelised to preferred areas, the rates for real estate may rise little bit," United Bank of India Chairman P K Gupta said.
Another leading PSU bank chairman, who preferred not to be quoted, said there was a possibility of a quarter per cent rise in retail sector loans. IBA Chairman V P Shetty, who is also the chairman of IDBI, said there is pressure on deposit rates.
"It is a clear case of asset-liability mismatch," he said, adding credit growth has been galloping at 30 per cent for three consecutive years. Against the high credit growth rate, deposits have been growing at just 20 per cent.
SBI Chairman O P Bhatt, however, said there was no immediate pressure on deposit and lending rates. "Our net interest margin is at 3.2 per cent and we expect it to remain at that level," he said.
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