SBI rules out interest rate hike in short term

There is no possibility of interest rate hike in the short-term, chairman OP Bhatt said here.

Last month also, Bhatt had said rates would go not up in the near future as there is enough liquidity in the system and credit offtake is usually low in the April-June quarter.

"If there continues to be sufficient liquidity in the system, the chances of interest rates going up in the near future are not there; but having said that hopefully credit growth will pick up," he had said.

Bhatt was in the city to open a point-of-sale at the GVK Mall here yesterday. He also inaugurated a branch at the Rajiv Gandhi International Airport here.

The bank is expecting to clock 20 per cent loan growth in the current fiscal, he said, adding, the bank, however, may not recruit many people this fiscal. Last year, the bank which recruited about 25,000 people including 20,000 clerks across the country.

Asked about the merger of State Bank of Indore with itself, he said, it will be done soon. SBI has already decided share swap ratio 34:100 for the merger. It has agreed to give 34 shares of SBI to minority shareholders for every 100 shares of the State Bank of Indore. For this purpose, SBI would issue up to over 1.16 lakh shares of face value of Rs 10 each to minority shareholders of State Bank of Indore.

SBI holds 98 per cent stake in State Bank of Indore that posted a net profit of Rs 279 crore in 2008-09.

This will be the second such merger of its associate banks after SBI merged State Bank of Saurashtra with itself in August 2008.

Post-merger, SBI will be left with five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. Among these, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed.

However, a decision on the merger of these affiliates would take some time, he added.