Andhra Bank may raise interest rates by 50 bps

"We will take the final call on interest rates on deposits today itself, as the real interest has become almost negative in the wake of a high inflationary pressure. We would increase the deposit rates possibly by 50 basis points," said K Ramakrishnan, chairman and managing director, Andhra Bank.

According to him price stability is one of the key to a sustainable economic growth and the regulator have to take the necessary measure.

"Containing inflation at a moderate level is a key to a sustainable economic growth and the regulator should play its role. Subsequently, all the banks have a role to play in channelising the flow of credit in the desirable sectors ," he added.

The Hyderabad based bank is also planning to raise $120 million as overseas borrowing in the next couple of weeks.

Talking about the capital raising plans for the current fiscal, Ramakrishnan said, "There is a headroom for raising about $300 million through this route but for the time being we will raise $120 million."

Similarly the banks would also raise Rs 200-300 crore in December, 2008 as  Tire II bonds.