It will be 8 per cent or less, says Bhatt.
State Bank of India (SBI) would announce its much-awaited base rate tomorrow, Chairman OP Bhatt said on Monday. On how much will the rate be, Bhatt said, “Not more than 8 per cent… 8 per cent or less.”
No bank has announced its base rate yet. The rare will replace the existing benchmark prime lending rate from July 1. All banks are waiting for cue from the largest lender, which has around 17 per cent of the loan market. Some large public sector banks like Union Bank of India and Bank of Baroda have said they will keep their base rate at 8-8.5 per cent.
Another large lender, Punjab National Bank, which will hold its board meeting tomorrow, is expected to announce its base rate after that.
Bhatt said the rate might make certain loans more expensive, though he did not specify the categories.
SBI’s chairman, however, declined to comment if the bank would extend its special home loan scheme. The offer, which charges 8 per cent in its first year and 9 per cent in second and third years, will expire on June 30.
“The offer is there till June 30, we will take a view on that issue also,” Bhatt said.
On liquidity, Bhatt said the situation might improve next week and SBI might not have to borrow from the repo window of the Reserve Bank of India (RBI). “There is a dramatic shift in liquidity, from surplus to deficit since early June. We are also borrowing from RBI. We should not be borrowing from next week onwards but at the moment we are,” he said.
On whether the bank was planning to hike its deposits rates, Bhatt said it would wait for RBI’s first quarter review of monetary policy scheduled for July 27 before taking a decision.
