The Reserve Bank of India has been desperately trying to control the soaring inflation but so far has not achieved much success in it. In an effort to tame inflation, the central bank raised its key policy rates 8 times since March 2010 but the target is yet to be accomplished.
The impact of hike in the policy rates was seen directly in the lending and borrowing rates as with the policy rates the lending and borrowing rates also kept soaring. Due to that at one hand the people who have invested in the deposits were earning more and more and on the other hand the borrowers were bearing the burden of escalating lending rates.
But now, when the liquidity in the system is very much in control the borrowers can breathe easy. The Chairman and managing director of Punjab National Bank Mr. K R Kamath said "As of now, no. There is enough liquidity in the system today. So to that extent I think that there is no immediate pressure on interest rates."
Most of the banks are waiting for the announcement of annual credit policy fro 2011-12, that is scheduled for May 3. Lenders will decide their plan of action once the credit policy is announced; but till then the borrowers can take it easy.
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