Interest Rate conflict between companies and bank

Hi,
There!

Air India CFO and chief officers of IDBI bank organized a meeting for many banks last week the discussions was close and DFO not going to sign for 50,000 crores rupees. The Air India was forcing that interest on loan should be added to government yields but bankers were not agreed at all. The Co-manager of IDBI bank and air India together stated that they will go on taking loan only if when interest rates are decided on the basis of gsake yields.

Air India like wise others companies who takes huge loan is agreed that banks PLR often does not change with chief ruled rates. Normally spoken, companies believed that they cannot be advantageous promptly even when the loan rates are reduced by some percentage. Air India explained that the CRR is reduced by 4 percent from October and it reaches 9 to 5 % now. Still in this period, banks PLR only changes with 1.5 to 2 %.

In January gsake yields reduced from 8.4% to 5.1% from new business year taking a huge loan from the market 10 year bond has grew and reached 6.7 % yields. Banks decided for a loan, several matters based upon composite of funds, its maintenance charge, CRR and SLR. The interest rates from customers and the difference between the capitals stated that banks margin. Air India is now awaiting for a response from bank to hear that they agree to add yields on interest.

Thanks for being here!