Banks could hike interest rates
	July 21, 2006 (New Delhi: )On Thursday, markets worldwide celebrated US Federal Reserve chief Ben Bernanke's comments on Federal Rates taking a breather. But India still has to watch out for the RBI's credit policy, which is likely to be unveiled on Tuesday. The policy might mean higher EMIs on a car, house and even education loans as a quarter of a percentage hike in interest rates is on the cards. However, it might also mean some comfort in the sense that one just might be able to earn a little more on his or her deposits. But are the banks actually going to raise the interest rates on saving? That was question doing the rounds when the PSU bank heads met Finance Minister P Chidambaram on Friday. The bankers say the demand for credit is set to grow at 30 per cent and to find funds to feed such a credit demand will be possible only if the deposit rates are raised, thus tempting people to save more. However, the Finance Minister believes that there is no shortage of funds. According to him, the saving rates are going up on account of anticipated rise in inflation. Banks have indicated that people should brace themselves for a hike in loan rates at least by a quarter per cent. A bank official said the interest rates could go up by 25 basis points and that they that were waiting for the Reserve Bank of India to give its nod on July 25. However, the banks do have a piece of advice for their prospective clients, that when interest rates are the rise one should opt for fixed rate schemes.