Back in Mumbai after a fortnight, I am finding the combo of heat and traffic jams a little difficult to handle. A short meeting with the top executive of a large PSU Bank yesterday was illuminating. It seems that there is no visible impact of the RBI's recent rate cut though it is a bit too early. Neither are any trends visible as far loan offtake is concerned. Last year, there was clear decelaration as far as home, car and other retail loans were concerned. The top banker expects this year to be no different. Possibilities of any further rate cut look remote with so many factors being in the play. For instance, international commodity prices. And yes, thanks to the interest rate differential between savings accounts and FDs, there was a large scale migration from savings account to FDs. You know what that means for banking stocks, To me, in the days to come, one can expect the situation to remain more or less at the level existing last year and not anything dramatically different.
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