State Bank of India (SBI) provided relief to its borrowers, said it is not considering an increase in lending rates even some of the private lenders have resorted to that step. Pratip Chaudhuri, Chairman of SBI said,” we are not thinking of hiking lending rates because we are witnessing a flow in deposits”.
“We are getting a huge inflow from the liquid mutual funds and last week we have received about Rs 10000-15000 crore of new money. We already are sitting on a compelling amount of extra cash,” he added.
Other banks like Axis Bank and Deutsche Bank have already hiked their deposit rates, generally seen as a forerunner to a lending rate increase. Connecting the move by the private banks on their wholesale deposits, Chaudhuri said “SBI stands to benefit because it is independent of the stream”.
According to him, “the people who are borrowing in the wholesale market are facing challenges, but we are lending in the wholesale market and in this way, it’s good for us. We are not facing any pressure. Our cost of funds remains near about 6.7 percent. Even At the base rate, we have a spread of 3 percent,” Chaudhuri added.
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