Kolkata, Jul 14: The State Bank of India (SBI) has said that the country should not expect the banks to reduce their interest rates further and to expect a hike in SBI interest rates in a period of six months.
Noting that the interest will depend largely on the liquidity in the market as well as fiscal management, SBI chairman, O P Bhatt on Monday, Jul 13 said that the interest rates will go up by 25-100 basis points in next six months.
"There is a possibility of interest rates going up by 25 to 100 basis points, if liquidity is not managed well when the busy season picks up," he said.
Presenting the Union Budget 2009-10, the Finance Minister Pranab Mukherjee promised that there will not any increase in the rates.
On the contrary, the net borrowing by the government in the current fiscal stands at Rs 3,97,957.47 crore to help reduce the 6.8 pc fiscal deficit. Due to this, the banks are out of funds which may lead to the hike in interest rates, the SBI chief said.