Motilal Oswal
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Motilal Oswal

Syndicate Bank expects deposit rates to escalate and yield curve to stay inverted in medium-term

Updated : February 22, 2019 12:33 PM IST

Reserve Bank of India (RBI) governor Shaktikanta Das met chief executives of public and private sector banks yesterday to discuss the challenges in rate transmission. Mrutyunjay Mahapatra, MD & CEO of Syndicate Bank spoke briefly about the meet.

Mahapatra said the RBI mentioned that monetary policy rates must be transmitted. “There was an interaction with select scheduled commercial banks in understanding why there is a lag between monetary policy pronouncement and actual transmission on the ground sector,” he added.

On deposit rate front, Mahapatra said, “Rates are likely to go up in the short-term and the yield curve will remain inverted for some time to come.”

Speaking about the capital infusion, he added, “It’s a proactive and positive step by the government to inject capital."

“We are one of the banks which are relatively stronger among public sector banks, so we have got nearly the least amount of capital. We were banking on recoveries and as well as incoming employee share purchase scheme to stay within the capital which will definitely help us in being better prepared for anything like NCLT recoveries if they do not come up.” Mahapatra further added.

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