Interest rates to rise: Bhatt

Interest rates to rise: Bhatt

Expects credit growth escalation

“If there is a huge credit growth, which I believe will happen with economy picking up, the interest rates are certain to go up,” Bhatt told newsmen here on the sidelines of a banking conclave. “I see interest rates going up by 25-100 basis points after Diwali. It all depends on the management of liquidity.” I don’t see interest rate going down further Bhatt said.
“Inflation is going up, government borrowing will increase and liquidity in the system will come down, so in the next three to six months, we could see interest rate firming up again.” Lending rates have fallen by about 200 basis points since last October after SBI began slashing its main lending rate by 425 basis points to lift a slowing economy.  He, however, conceded that demand for loans has not grown despite low interest rates. 

Talking about the bank’s plans of merging subsidiaries with itself, he said there is no immediate plans for across-the-board mergers.  

As for SBI’s plans for a foray into non-life insurance business, the bank has received in-principle approval from Insurance Regulatory and Development Authority. 
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