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Pratip Chaudhuri, chairman of State Bank of India (SBI), which raised its bulk deposit rates on Thursday, said on Friday that the bank had no plans to increase lending rates anytime soon.
Over the past few days, all top private sector banks and one public sector bank (Andhra Bank) had increased their base rates, responding to the Reserve Bank of India’s (RBI) measures to drain out liquidity from the market. RBI’s measures increased the cost of funds for banks.
Shikha Sharma, managing director and CEO of Axis Bank, agreed that the cost of funds have increased, “which is why most of the banks have raised their base rates by about 25 basis points”.
She added, “I think that will be a fair assumption to make that average cost of funds for banks have probably increased by at least that much.”
