The interest rate cycle is likely to turn soft by the end of financial year 2023-24 (FY24) and the share of bulk deposits has already peaked. The share of retail deposits would rise and help keep net interest margins intact, Sanjiv Chadha, managing director and chief executive of Bank of Baroda, tells Abhijit Lele. Edited excerpts:
Q. Inflation is softening and the Reserve Bank of India (RBI) has paused repo rate action. How are interest rates on deposits and advances going to pan out in FY24?
A. The assessment is that the system might have reached the end of the policy rate hike cycle and we could also see some cuts at the end of FY24. This seems to be in sync with global trends. The large part of liabilities that the bank raised in the last 12-18 months has a maturity profile of one-and-a-quarter years. There may be downward pressure on yields and the bank will be in position to re-price depo
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