FM confident of banks not hiking rates; lenders differ

Finance minister Pranab Mukherjee today exuded confidence that banks will not raise their interest rates in response to RBI's tight monetary policy even as lenders indicated that they will be upping their lending and deposit rates.

Finance minister Pranab Mukherjee on Saturday exuded confidence that banks will not raise their interest rates in response to RBI's tight monetary policy even as lenders indicated that they will be upping their lending and deposit rates.

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"No I don't think so. Banks are fully aware of it and they have taken note of it and they have adjusted their plans accordingly," Mukherjee told reporters when asked whether RBI's tight monetary policy will affect interest rates.

However, a number of PSU banks have already raised their deposit rates and lending rates for existing borrowers and few other lenders have indicated that they will be doing it soon.

Country's largest lender SBI Chairman O P Bhatt said, "I think there is an upward bias (on interest rates) that will take place.