However, what is worth noting, is that the level of spread seems to be still high as compared to an average level of around 3 to 4 per cent observed in the case of many developing countries. Narrowing of spreads is reflective of the efficient management of the bank through minimization of operational costs.
The smaller the spread, the greater could be the stimulation for loan demands for  BIS Review 24/2001  3  industrial development. It will also be easier to provide the necessary stimulus to the process of deposit mobilization, particularly from those areas/regions which though endowed with surpluses/savings but have no investment/saving outlets.