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SBI considering rate hike: official

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Last Updated: April 05, 2007, 16:32 IST

SBI considering rate hike: official

Leading private sector banks, ICICI, HDFC and UTI Bank have already increased their PLRs after RBI’s rates hike.

New Delhi: Following ICICI, HDFC, UTI and PNB’s decision to hike their prime lending rates (PLR), India's largest commercial bank, State Bank of India, on Thursday hinted at a hike in its interest rates next week.

Leading private sector banks, ICICI, HDFC and UTI Bank have already increased their PLRs following the RBI move to raise the cash reserve ratio (CRR) and a key rate last Friday.

After RBI last week announced changes in monetary policy to squeeze liquidity, another major public sector bank, Punjab National Bank (PNB), on Wednesday said that it would take a decision on hiking its prime lending rate (PLR) in the next four-five days.

Now the countries largest nationalosed back SBI also considering a rate hike within next ten days.

"We are examining its (RBI move) impact on our balance sheet. It is under examination....we will take a decision in a week or ten days," the bank's Managing Director, Yogesh Agarwal, told PTI in Mumbai on Thursday.

Public sector banks, which have adopted a wait and watch approach, have already indicated that the recent RBI hike in commercial banks' cash reserve limit and key short-term lending rate and would severely affect their profits as also their lending capability.

In January and February, when the RBI hiked CRR in tranches, Finance Minister P Chidambaram had asked public sector banks not to increase their home loan rates.

Almost all public sector banks complied with the directive as their exposure on home and education loans did not form a sizeable percentage of their total exposure, unlike in the cases of ICICI and HDFC.
first published:April 05, 2007, 16:32 IST
last updated:April 05, 2007, 16:32 IST