SBI to take call on raising rates in day or two
The country's largest lender, State Bank of India, will decide on hiking interest rates by at least 25 basis points in a couple of days.
"Our ALCO (Asset Liability Committee) would meet tomorrow or so," SBI Chairman O P Bhatt told in New Delhi.
Last week, while announcing the bank's results for the first quarter, Bhatt had said, "There is an upward bias on interest rates... We are looking at that... Now that our quarterly results are out, we shall review our interest rates."
Asked about the likely hike in rates, he had said: "It has to be a minimum 25 basis points."
He had said all banks are increasing their deposit and benchmark prime lending rates (BPLR) and the bank is "waiting in the wings".
Since July this year, banks have shifted to a base rate, which is a floor for lending rates, from the BPLR.
However, existing loans continue to be linked to the BPLR, though borrowers have the option to switch to the base rate system.
"You can revise the interest rate only once a quarter... The revision will now be for the BPLR," he had said.
"The deposit rates have almost bottomed out for the industry and there is a definitely an upward bias as far as advances are concerned because of the way RBI is managing inflation and liquidity," he had said.
Following the monetary action, most of the public sector lenders, including Punjab National Bank, Bank of Baroda, Bank of India, Oriental Bank of Commerce and Canara Bank, responded by hiking their BPLRs by up to 50 basis points.
At the same time, many banks have increased deposit rates.