The country's largest lender State Bank of India today hinted that lending rates may rise from the second quarter of fiscal 2010-11, even though there is no immediate pressure on interest rates.
"So far as bank lending rates are concerned, I do not expect lending rates going up before May-June," SBI Chairman O P Bhatt told reporters.
He said money supply is under pressure, but interest rates will remain stable in immediate future.
"(There is) pressure on liquidity, but no immediate pressure on interest rates," Bhatt said.
In its monetary review recently, the RBI asked banks to keep more cash with it, which will shrink money supply by Rs 36,000 crore from the system.
The apex bank's move to hike Cash Reserve Ratio (CRR), portion of deposits banks kept in cash with the central bank, by 75 basis points to 5.75 per cent will come into effect from February 13 in two tranches.
Source BloombergUTV
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