Finally, the banks are gearing up to raise their deposit and lending rates following the measures of the central bank to curb surging inflation.
According to bankers who had thus far not responded to the Reserve Bank of India?s measures of raising key rates ?cash reserve ratio, repo and reverse repo rates?this is likely to happen in next one or two weeks from now.
A senior official of the country?s largest lender, State Bank of India, said that his bank is in wait and watch mode .
The official hinted that his bank may take a call on its deposit rates first which will be followed by the lending rates too.
However OP Bhatt, chairman, SBI had told that the bank would wait till forthcoming annual credit & monetary policy to be announced by RBI on April 20 to get the final signals on hiking lending rates.
Second largest state-owned lender, Punjab National Bank(PNB) has currently the lowest BPLR of 11%, is yet to take a call on its deposit and lending rates. KR Kamath, chairman and managing director of PNB, said ?As of now, we have no plan to raise either deposit or even lending rates?.
Yet another state-owned lender, Canara Bank, is also likely to take a call on both deposit and lending rates simultaneously in a week or so.
Talking on condition of anonymity, a senior official of the bank said that deposit rates may go up first .
“But it will depend on our asset liability management (ALM) requirements which will decide which bucket of term deposits need to be touched,?? he added. Bank of Baroda (BoB) is also likely to take a call on the issue in near future. However, the extent of rate hike in both deposit and the lending is yet to be finalised by the bank said . RK Bakshi, executive director, Bank of Baroda. ?We have not decided anything as of now. The situation currently very dynamic.??
However, it all depends on the liquidity which will drive our decision to hike the rates or not, said Bakshi. After hiking the its deposit rates in some buckets on last Saturday, the state-owned lender, UBI, is now likely to take a call on its lending rates too.
The bank has increased its domestic term deposit rates in the range of 25 to 50 basis point for retail deposits of less than Rs1 crore with a tenure of one year and above with effective from April 05, 2010. Retail deposits of one year will now offer 6.5% as against 6%.
S Raman, executive director, UBI said that ?Keeping in view the rising inflation , interest rates will go up down the lines. The only problem is that liquidity surplus is still there in the system.?? Bank of India (BoI) is treading cautiously on lending rates after revising its deposit rates, The bank had revised its deposit rates in the range of 25-150 basis points effective from 11 March, 2010.