Understanding The Banking Scenario: CARE Ratings
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CARE Ratings Research Report
The banking picture this year has been quite different from the past. There is surplus liquidity in the system as banks are parking large amounts in the reverse repo auctions.
Growth in credit is lagging that of deposits and yet there is a tendency for government securities yields to increase notwithstanding aggressive measures by the Reserve Bank of India to keep them down.
At the same time, banks are lowering their lending rates to garner business, especially on the retail side.
Hence the movement of commercial lending rates and G-Secs are not in consonance
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