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SBI to review deposit, lending rates: Bhatt

Posted on 13 August 2010,    
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SBI to review deposit, lending rates: Bhatt

The country's largest lender State Bank of India on Thursday said it will take a call on hiking deposit rates and lending rates for existing borrowers by at least 25 basis points.

"There is an upward bias on interest rates ... on the both deposit and lending rates. We will review deposit rates and benchmark prime lending rate," SBI Chairman O P Bhatt told reporters in New Delhi while announcing the first quarter results of the bank.

When asked about the quantum of the likely hike, Bhatt said, "It has to be minimum 25 basis points."

He, however, did not say when the bank would review the rates.

"The deposit rates have almost bottomed out for the industry and there is definitely an upward bias as far as advances are concerned because of the way the RBI is managing the inflation and liquidity," he added.

Most of the public sector lenders, including Punjab National Bank, Bank of Baroda and Canara Bank, have hiked their lending rates after the Reserve Bank of India (RBI) increased its short-term lending (repo) and borrowing (reverse-repo) rates by up to 50 basis points on 27th July.

Bhatt also said that the bank is planning to raise Rs 20,000 crore from rights issue this fiscal.

If rights issue does not happen, options are also open for raising the fund through preferential issue and follow-on offer, he added.

He expects the bank's credit growth at 21-22 per cent for the current fiscal.

 



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