Banks wary of lending rates

By Vision Reporter

Although the easing of the Central Bank benchmark rate and the declining inflation have started having an impact on bank interest rates, returning to the pre-July 2011 rates will take a time as banks cautiously study the market, a top bank said last week.

“The whole equation relies on demand and supply of money in the market. The individual banks have to sweat it out and bring in more cheap deposits and translate this into cheaper credit for the public,” Dr. Sudhir Ruparelia, the Crane Bank deputy chairman said.

Speaking at the opening of the bank’s 21st branch in Masaka, Sudhir said although reducing interest rates is critical to getting the economy back on its feet in the short term, it is more important that all stakeholders address the issue of increasing savings as a more permanent solution.

“The worst is over and it will not be long before we normalise,” he said.