State Bank of India (SBI) on Monday said it would announce its base rate, which is expected to be around 8%, on Tuesday. SBI chairman OP Bhatt made it clear that the base rate will not be more than 8%. The interest rates on some of the loans may go up because of the base rate implementation on July 1, he added.
Bhatt maintained that his bank would take a call on revision of deposit rates only after the RBI credit review, which is slated for July 27.
Punjab National Banks (PNB) board is also meeting on Tuesday in Mumbai to take a call on its base rate.
Corporation Bank, at the same time, is likely to decide on its base rate on Tuesday. Allahabad Bank chief JP Dua said though his banks board has already discussed the base rate, it would be up to the the banks assets & liability committee (ALCO) now to take the final call.
The CMDs of Bank of India (BoI) and Bank of Baroda (BoB) said they would announce their base rates in the next two days.
In case of BoB , the base rate would be somewhere between 8 and 8.5%, whereas BoI is likely to fix its base rate around 8.5%. The banks board is meeting to decide on the rate on June 30.
In case of Oriental Bank of Commerce, the base rate is likely to be between 7.75% and 8.25%.
Earlier, BoI executive director BA Prabhakar told FE the bank was waiting for SBIs announcement on the base rate to know what methodology the bank (SBI) was going to adopt while calculating the base rate.
Although speculations are there that new generation private sector banks will fix base rates lower than their public peers, according to a private sector banker, it may not be necessary in all cases.
Essentially, bankers are gazing at different market situations. Sometimes, we try to look at other bankers as to what stand they are taking. We make sure, profitability should not be hit due to base rate, said a top official of a south-based private bank, who expects its base rate in the range of 8-8.5%.