Bankers mull over lending rate hike to help out margins

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Mumbai, Jun 12 (UNI) In the backdrop of repo rate hike, bankers are mulling over lending rate hike in order to help out their interest margins.

In this regard, State Bank of India will review its interest rates on Friday, its chairman O P Bhatt told reporters at a conference here today, a day after the Reserve Bank of India raised short-term lending rate.

The RBI had raised its repo rate by 25 basis points to 8.0 per cent and said it was aimed at containing inflation expectations yesterday.

Mr Bhatt hinted that SBI might raise prime lending rate by the end of June or early July.

''There will be some rationalisation of interest rates and maybe we need to raise PLR,'' he said.

Meanwhile, Housing Development Finance Corporation will take a decision on raising interest rates on home loans by the end of this month, said HDFC Chairman Deepak Parekh and stressed that there was certainly an upward pressure on interest rates.

''We will see how short-term interest rates behave, how liquidity conditions in the market are and then take a decision whether we have to raise interest rates by July 1,'' Parekh said.

Other banks including Union Bank of India, Bank of India, Punjab Bank and ICICI Bank would also review their rate structure.

ICICI Bank Managing Director K V Kamath said his bank was assessing the situation. However, he was of the view that the present monetary stance by the apex bank would not hamper the growth and his bank would wait to take a decision on interest rates.

However, SBI Chairman said there was a slight slowdown in consumer demand for loans and the interest margin would be under further pressure.

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