Moneycontrol Bureau
After yet another rate hike by the Reserve Bank of India, bankers are left wondering on what their next move would be. Will the RBI salvo be passed on to customers, or are the banks going to bear it all? S Raman, chairman and managing director of Canara Bank who was expecting a pause in rate hike this time, said, whether or not they will raise rates is a tough call for now. "The transmission (of rate hike) may not be immediate; it will happen but with a bit of lag," he said. Did you miss: Dozen hikes in 18 months: Is inflation limiting RBI options?A Krishna Kumar, managing director of the State Bank of India and BA Prabhakar, executive director of the Bank of India too feel the same. Passing on the hike is inevitable, they said. "We need a broader discussion in our management before we take any action on that. There are lots of implications for hiking rates at the present moment so all that has to be considered before we take a view. But probably yes we will need to hike the rates in due course," Kumar added. The credit growth dilemma Growth in commercial credit offtake from banks by major sectors slowed to 18.9% in July, 2011, from 20% in the same month last year. According to Raman the offtake may not even come to those levels now. "It may be between 17% and 18%," he said. Going forward, the RBI would make a reassessment of the prospects of the credit growth in the next policy statement. "I would not be surprised if the RBI would lower the credit target to 17-17.5%," he added. Kumar however remains optimistic on a good credit growth once the second half of the year sets in. "I am not so convinced that there will be a slackening in the credit growth in the second half of the current financial year. I think the indications are that there would be growth in credit. But having said that, I also have to say that this would depend a lot on the rate of interests which is there at the material time," he pointed out. To Prabhakar the current growth numbers don
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