Interest rates may rise in future, says PNB chief Sunil Mehta
New Delhi: Ahead of Reserve Bank of India’s (RBI) monetary policy review on Wednesday, Punjab National Bank (PNB) managing director Sunil Mehta said lending rates are likely to go north due to hardening inflation.
“As of now interest rates are stable but the way inflation is moving, they are likely to harden in the future,” he said after announcing the third quarter numbers in New Delhi. This seems to be a good news for the savers. However, borrowers will have to shell out extra if the lending rates go up.
RBI will unveil its bi-monthly policy on Wednesday amid widespread expectations that the central bank may go in for a status quo for the third time in a row. This would be the first policy announcement after the union budget 2018-19, that was unveiled on 1 February.
Last week, PNB raised its interest rates steeply by up to 1.35% on bulk deposits of various tenure taking a cue from the country’s largest lender State Bank of India (SBI). Following the revision, interest rate on term deposit of 46-179 days was increased by 1.35% to 6.25%, effective 1 February.
Besides, interest rate for term deposit of 180 days to less than 1 year was revised upward to 6.25% from the earlier rate of 5%, PNB said in a statement. In the maturity bucket of one year and above the interest rate has gone up 0.75%.
Last month, SBI hiked the interest rate on bulk deposits of over Rs10 crore by up to 140 basis points. The bank had last raised deposit rates by up to 1 percentage point in November. At least, three banks have already hiked lending rates last month.