Lending rates to remain steady: SBI
The country's largest lender, SBI, on Tuesday said lending rates will remain steady even as credit demand would improve in the next few months.india Updated: Mar 22, 2011 23:16 IST
The country's largest lender, SBI, on Tuesday said lending rates will remain steady even as credit demand would improve in the next few months.
"It (lending rate) will remain stable ... April is a slow month (for credit offtake). It will take a few months for demand to pick up," State Bank of India (SBI) Chairman O P Bhatt said on the sidelines of the AIMA event here.
He, however, refused to give a pointed reply on whether or not the deposit rates have reached optimum levels.
"Recently all banks raised deposit rates, I can't say whether it has peaked or not", Bhatt said.
Pressure has been building up on banks to raise interest rates following a 25 basis points hike in short-term lending (repo) and borrowing (reverse repo) rates announced by the RBI at its mid-quarterly review on March 17.
Last month, SBI raised lending and deposit rates on select maturities by 25 basis points in response to a similar rate hike announced by the Reserve Bank in January.
SBI had revised the base rate or the minimum lending rate by 25 basis points to 8.25%.
At the same time, SBI's Benchmark Prime Lending Rate (BPLR) for the existing customers was also increased by 25 basis points to 13%.
Besides, the bank also increased fixed deposit rates on two select maturities by 25 basis points. Both 555 days and 1,000 days fixed deposits were increased to 9.25% from existing 9%.
Asked on the timeline for introduction of SBI's Rs 20,000 crore rights issue, Bhatt said it will take place next year.
Rights issues are offered to existing shareholders, he added.