State Bank of India Chairman Arundhati Bahttachrya has said that they expect the banking sector to return to normal by the end of February. India’s leading bank has launched several products like Bridge loans and Instant Home Top up loans to re-start the lending process.
She said that the amount of cash that will eventually remain in the system cannot be ascertained as of now, but the situation will be clea by February 2017. The bank has also slashed its one year lending rate (MCLR) by 0.9%, which led to many more banks slashing their lending rates.
As far as cash in the system is concerned, the country already has 8.5 lakh crores in the system and the number shall reach 10 lakh crores by the end of January. They had earlier expected over 10 – 15 percent of deposits to stay in the system, but the figure is revised at 40%.