SBI to decide on rate hike within next ten days, says official

SBI to decide on rate hike within next ten days, says official
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First Published: Thu, Apr 05 2007. 08 14 PM IST
Updated: Thu, Apr 05 2007. 08 14 PM IST
PTI
Mumbai: India’s largest commercial bank, State Bank of India, on 5 April hinted at a hike in its interest rates next week following the RBI move to raise the cash reserve ratio (CRR) and a key rate 30 March.
“We are examining its (RBI move) impact on our balance- sheet. It is under examination....we will take a decision in a week or ten days,” the bank’s managing director, Yogesh Agarwal, said.
On 4 April, another major public sector bank, Punjab National Bank (PNB), said that it would take a decision on hiking its prime lending rate (PLR) in the next four-five days.
Leading private sector banks, ICICI, HDFC and UTI Bank have already increased their PLRs after RBI announced changes in monetary policy to squeeze liquidity.
Public sector banks, which have adopted a wait and watch approach, have already indicated that the recent RBI hike in commercial banks’ cash reserve limit and key short-term lending rate and would severely affect their profits as also their lending capability.
Agarwal also made it clear that there was no dearth of funds for productive sectors and the bank did not face any liquidity problems.
On SBI’s efforts to recapture market share it had lost in the last few years to new entrants, Agarwal said that the bank had formulated strategies that included enhancing customer service and re-engineering systems and processes.
Technology would also play a big role in this initiative with the bank planning to bring all its branches under the technology umbrella this year.
These measures were expected to get SBI a good market response and “help us recapture our lost market share,” he said.
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First Published: Thu, Apr 05 2007. 08 14 PM IST
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