Indian banks must brace for interest rate whiplash: BCG

MUMBAI: A report by Boston Consulting Group warns that Indian banks must prepare for a period of heightened interest rate volatility after more than a decade of relatively stable and downward-trending rates. The study notes that the impact of policy rate changes on bank performance is neither immediate nor uniform, and that credit growth is more dependent on borrower sentiment and lender confidence than on rates alone. BCG's report urges banks to abandon linear forecasting and adopt scenario-based planning.