The country?s largest lender, State Bank of India, is likely to raise its lending rates by 50 basis points post Reserve Bank of India?s move to hike both cash reserve ratio and repo rate by 50 basis points . The decision to this effect was likely to be taken during the next assets and liability committee (ALCO) which was likely to meet within a day or two.
Meanwhile, ICICI Bank managing director Chanda Kochhar said the bank would take a call at the appropriate time. ?In the immediate future, we are not going to alter our lending as well as deposit rates as our cost of funds have yet not gone up. However, we are monitoring our cost of funds and repercussions of the monetary policy on day-to-day basis, and we might take a call at an appropriate time,? she said.
A senior official of SBI told FE on the condition of anonymity that bank?s BPLR currently at 12.25% was one of the lowest in the industry as it had reduced it by 50 basis points few months back. Also, SBI had not tinkered with its interest rates when the Reserve Bank o India had raised its repo rate by 25 basis points in recently.
?But now we will have to take a call to protect our margins,? said the official while agreeing that the ALCO was meeting frequently these days keeping in view the turbulence existing in the market.
The committee had met last Saturday but it remained inconclusive on the interest rates. The bank was likely to shell out the sum amounting to Rs 6,000 crore out of its current deposits level of Rs 5,000 crore thanks to the recent cash reserve ratio hike in two tranches by the RBI, the first tranche of which will come into effect since July 5.
Meanwhile, the executive council of the bank met in New Delhi on Wednesday to discus issues like compliance to the listing agreement of stock exchanges sanction of loans among others.