Today when I got a mail from ICICI Bank offering 10.5% interest rate on deposit, I was wondering why did they do so? They are encouraging us to deposit more cash but do we really have money? Most of the corporate are looking for fund which is hardly provided by banks now a days due to breach of trust and risk associated with corporate especially real estate companies.At one side RBI is reducing Repo rate,Cash Reserve Ratio and Statutory Liquidity Ratio and creating huge liquidity (read: giving fund to banks so that other can save their life before few will drop and die) such that banks can pass this to corporate or public but it is really happening in real economy? No Way!!!
Will these rate cut will help us? HBJ Capital says, NO!!! RBI is going for rate cut but are banks passing these liquidity to public or corporate, definitely NOT!!! Hence we can say that RBI knows that our banks are in severe shortage of cash and RBI also knows that lending to corporate is not happening, what does it mean? What these banks are doing with these surplus cash? Are they keeping in order to fullfil cash withdrawal from MF, Corp or Public. Tell me which bank wants to announce that their cash reserve is dried and they are not able to pay back the money they have take as safe deposit from public.
It is very clear, due to shortage of fund for few banks soon we will see couple of banks falling down or getting merged with nationalized banks, so which are those banks @ risk?
-JK, Equity Research Analyst.
2 comments:
I think koz these Financial Crisis, around 6 Month's back a "Smart guy" sold his bank - CBoP to HDFC Bank??
You are very much right, inspite of 2009 bank consolidation by RBI which is suppose to be unlocking values in Indian banks, why CBoP was ready to get merged with HDFC?
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