The biggest lender of the country, State Bank of India has hiked interest rates on short term corporate loans by 25-50 basis points. O P Bhatt, Chairman of SBI said, “With surplus liquidity gradually disappearing from the system, we have re-priced certain segments of our short-term corporate loans by 0.25-0.50 bps upwards.”
But he said, it is quite unlikely to hike the deposit rates immediately. The bank anticipates liquidity to continue in the economy.
Bhatt said, “We have got requests and demands for that kind of money. At the maximum we will lend Rs 18,000 crore. Having said that, we are still having a surplus liquidity of Rs 26,000”.
Union Bank of India CMD, M V Nair has said that the bank will be spending Rs. 2000 crore for 3G auctions. He said, “Liquidity will not be impacted with the money flowing out as we already sitting on adequate liquidity”.
Talking about bad loans, Bhatt said that NPAs of the bank have fallen over the last few years. The bank had posted a fall in net profits in the Q4 of the earlier fiscal due to rise in NPAs.
He said, “Usually in April there is always a negative growth. So it is too early to say if it is because of the slack season or if there is more to it,”.