Deposit rates set to inch up from August-September: O P Bhatt

Mumbai; A day after the Reserve Bank of India (RBI) hiked policy rates, the country's largest lender State Bank of India (SBI) said deposit rates are likely to climb up as early as next month, reports PTI.

"There is an upward bias on the deposit rates. (Rates should move up) by August-September by at least 0.25%," SBI chairman O P Bhatt told reporters here on the sidelines of an event.

Yesterday, the RBI hiked the reverse repo rate - at which it absorbs excess liquidity from the system - by a larger-than-expected 0.5% to 4.5% and repo rate - lending rate to banks - by 0.25% to 5.75%.

Mr Bhatt, however, ruled out any impact on SBI's margins owing to the likely jump in the deposit rates, as loan growth is also likely to pick up in the days ahead on the back of recovery in the economy, which would help the lender maintain its margins.

SBI has seen an increase in non-performing assets, especially from loans given to farmers, Mr Bhatt said.

 Yesterday, talking to reporters after the credit policy announcement, Mr Bhatt had said that 'by and large' interest rates are unlikely to go up in the second quarter.

Asked about the efforts to bail-out the debt-ridden aviation industry, he said the bank is considering ways to give assistance to the airlines. "Banks have been helping troubled industries from time to time," Mr Bhatt said, without detailing further.

Earlier, speaking at the event, Mr Bhatt said that SBI plans to open five more branches in UK over the next five months, as part of its efforts to make UK as the hub for European operations.

Last week, amid market turbulence and volatility, SBI had raised $1 billion (about Rs4,700 crore) through bonds from the US market, paving the way for others to tap the market.

Mr Bhatt said the bank would use this amount for foreign currency loans to corporate clients abroad. 

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Core sector grows by 3.4% in June; slowest in 10 months

New Delhi: The country's infrastructure industries expanded by 3.4% in June, the lowest in 10 months, on a sharp slide in coal, electricity and cement output, reports PTI.

Output of crude oil, petroleum refinery products and steel that make up the six core infrastructure industries were marginally higher or flat, according to commerce ministry data released today.

The six industries account for around 27% of factory output measured by the Index of Industrial Production (IIP).

The last time growth was slower than this was in July 2008 when it expanded by 3.2%.

In May 2010, the core sector had grown by 5% and in June 2009, the growth was 6.3%.

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Keki Mistry joins BSE Board

The Bombay Stock Exchange (BSE) said Keki Mistry, vice chairman and chief executive of Housing Development Finance Corp Ltd (HDFC) has joined its board as shareholder director.

A Bachelor of Commerce in advanced accountancy and auditing and a Chartered Accountant, Mr Mistry has been actively involved in setting up of several HDFC group companies including HDFC Bank, the Exchange said in a releaseThis is

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