India’s biggest lender, State Bank of India has said it will declare its base rate by June 15 and the rate will be computed according to SBI’s cost of deposits.
SBI Chairman O P Bhatt said, “For State Bank alone, we are looking at the cost of deposits and not the cost of funds (for the calculation of base rate). The tenure (of deposits) we have not decided”.
Though Bhatt did not declare the base rate of SBI, it is believed that it could be somewhere about 8%. Bhatt said, “Right now, we have such a wide variety of options, we need to make sure that our customers do not suffer nor should the bank”.
Chiefs of major state-owned banks met at the initiative of SBI to discuss numerous operational challenges while switching over to the new system recommended by the Reserve Bank.
Bank Chiefs who attended the meeting at SBI to talk about the base rate implementation are Union Bank Chairman and MD, M V Nair, Bank of Baroda CMD M D Mallya, Bank of India CMD Alok Misra, Central Bank of India Executive Director Ramnath Pradeep etc.