State Bank of India chairman OP Bhatt on Tuesday said the bank will wait till the RBI?s monetary policy review in April before reviewing interest rates. He said the unexpected 25 basis points hike announced in the repo and reverse repo rate announced by the RBI last week was unlikely to result in any hike in market rate, but will help anchor inflation expectations.
The country?s largest lender said it will approach the government next fiscal to seek approval to raise Rs 20,000 crore through a rights issue, which will help its meet capex requirements.
?We will start talking to the government in the next financial year. It will take some time. There is no hurry. We have enough capital. But we take a long-term view, which is why the rights issue. We don?t want to hurry at the last moment,? he said.
Bhatt had earlier said SBI would prefer a rights issue to a dilution of government holding for raising funds. A company issues shares to existing shareholders in a rights issue. The government currently holds 59.7% in the SBI. SBI will have to raise around Rs 40,000 crore over the next five years to support its expansion plans, he said. The bank has a capital adequacy ratio of nearly 14%.
He said the contribution from the government towards the rights issue should ideally come in one tranche. In its last rights issue in 2008, when SBI raised Rs 16,736 crore, the government had contributed Rs 10,000 crore.
Bhatt said the RBI may further hike its key rates in the annual monetary policy on April 20, if inflation remains high in March as well.
The RBI action will depend upon the inflation rate in March, he said on the sidelines of an infrastructure conference organised by the Planning Commission. Inflation rose to 9.89% in February from 8.56% in January, breaching the RBI?s projection of 8.5% by March-end.
?We would like to wait till April policy as far as interest on lending side is concerned and if you wait for April policy that means the earlier we would like to change our rates, cannot be before May,? he added.