The country's largest lender State Bank of India (SBI) today said it does not see interest rates rising till Diwali this year and ruled out any immediate plans of rights issue offer.     

There is very little possibility of interest rates rising till Diwali, SBI Chairman O P Bhatt told reporters after inaugurating a branch here.     

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There are speculations that interest rates may go up because of the huge government borrowing programme. Yesterday, Finance Secretary Ashok Chawla also said that the government borrowing programme will not jack up interest rates.     

On the possibility of rights issue he said, "Rights issue is not immediately on cards."     

Last year, SBI raised Rs 16,736 crore through rights issue of which the government contributed around Rs 9,900 crore.     

Bhatt also said the bank expects to maintain 40 per cent growth in net profit this year as well.     

SBI's net profit increased 36 per cent to Rs 9,121 crore during 2008-09 against Rs 6,729.1 crore in the previous fiscal despite the global financial meltdown. The economic growth during 2008-09 slipped to 6.7 per cent from over nine per cent in the previous three years.     

The total income of SBI rose to Rs 76,479.2 crore in 2008-09 against Rs 57,645.2 crore a year ago, up by 33 per cent.     

Interest income stood at Rs 63,788.43 crore, up 30 per cent from Rs 48,950.31 crore in the previous fiscal.SBI's other income surged to Rs 12,691 crore against Rs 8,695 crore registering an increase of 45 per cent.

Deposits grew 38.08 per cent in FY09. The bank's advances grew by 29.8 per cent against the industry average of about 17 per cent. However, due to high cost of deposits, the Net interest Margin for FY09 fell to 2.93 per cent against 3.07 per cent recorded last fiscal.

As such as and when there is opportunity, the bank can go for tier I capital, including rights issue, he added.     

"But this does not mean that it (rights issue) is immediately on cards. Right now our capital adequacy ratio is 14.25 per cent. So there is no urgent need of capital," he added.

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