With inflation declining for the sixth week in a row, ICICI Bank chief K V Kamath on Friday said lending rate will come down to single digit in a year and predicted attractive opportunities in treasury operations in the soft interest rate regime.

“Single digit lending rate and double-digit growth is what we should look forward to one year from now,” Kamath said in a press conference after the ICICI Bank board meeting in Mumbai.

The board appointed bank’s joint managing director and chief financial officer Chanda Kochhar as the CEO and managing director. Kochhar succeeds Kamath, who will retire on April 30 next year. He would replace N Vaghul as the non-executive chairman after his retirement.

Kamath said inflation is expected to be in the range of 2.5-3 per cent and bond interest would be in the range of 4.5-5 per cent.

Thus, banks stand to gain from treasury operations, he said, adding that the direct impact of this would be a decline in the borrowing cost.

At present, the bank’s prime lending rate varies between 12.5 per cent and 17 per cent. In the past two weeks, bulk deposit rates have come down by 2 per cent. Cost of fund is expected to fall further sharply, he said.

“So clearly, we see an environment of what we saw in 2001-02,” he said.

Speaking on the occasion, Kochhar said correction in interest rates provides an opportunity for banks in the treasury side.

Besides, she said, banking sector has to gaze when in the retail cycle is reviving so that banks can seize this opportunity without any delay.

Asked about whether there could be further change in the management structure, Kochhar said, “As of now we are not looking at change in management structure.”

“In the month of May there would be one vacancy therefore one more director has to be appointed. No decision has been taken on that front,” she said.

The post of joint managing director and chief finance officer would be vacant after her elevation to the managing director.

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