Mumbai: A day after the Reserve Bank of India (RBI) hiked its policy rates to rein inflation, country’s largest lender, State Bank of India (SBI) on Wednesday said deposit rates in the industry are likely to climb up as early as next month.
“There is an upward bias on the deposit rates. (Rates should move up) by August-September by atleast 0.25%,” SBI chairman, OP Bhatt told reporters, here on the sidelines of an event.
On Tuesday, the RBI hiked its reverse repo rate, at which it absorbs excess liquidity from the system, by a larger-than-expected 0.50% to 4.5% and repo rate, at which it lends to banks, by 0.25% to 5.75%.
Bhatt, however, ruled out any impact on SBI’s margins owing to the likely jump in the deposit rates, as loan growth is also likely to pick up in the days ahead on the back of recovery in the economy, which would help the lender maintain its margins.
SBI has seen an increase in its non-performing assets especially from loans given to farmers, Bhatt said.
Bhatt on Tuesday, after the credit policy announcement, had said that ‘by and large´ interest rates are unlikely to go up in the second quarter.