SBI to take call on hiking base rates, soon

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Bangalore, Jul 6: State Bank of India would take a call on increasing base interest rates today (Jul 6) or Thursday, Jul 7, its Chairman Pratip Chaudhuri said.

He told reporters here that the asset-liability committee of SBI is meeting today or tomorrow to take a decision. Chaudhuri said after RBI raised the rate last month, most banks have increased their rates and others are in the process of doing so.

"You can expect most banks to raise the base rates between 25 and 50 basis points", he said.

To a question, Chaudhuri said he does not expect RBI to hike the rate further in the quarterly review of monetary policy on July 26.

"As of now, in our view is it (the rate hike by RBI) will come with a lag...with a gap", he said, adding, he would be surprised if RBI indeed raised the rate on July 26.

Responding to queries, he also said with interest rate hikes, most of SBI's corporate customers are "slighly reluctant" to take long-term loans. "Corporate sector is hesitant", Chaudhuri added. "What we are slightly worried about is slack in the pace of (loan) sanctions".

He said SBI logged net interest margin of 3.35 per cent last year but it's currently growing at 3.5 per cent-plus.

"There is definite improvement of 15 basis points," he added.

PTI

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