SBI base rate seen around 8%, says Bhatt

Country’s largest lender State Bank of India (SBI) today said the proposed base rate for the bank seemed to be around 8 per cent.

SBI Chairman OP Bhatt said this on the sidelines of an AIMA event here.

The Reserve Bank of India (RBI) has proposed to replace the benchmark prime lending rate (BPLR) with base rates from April this year.

The base rate is the lowest rate that a bank can charge from a customer and is intended to bring about more transparency in the lending operations of banks. SBI was at present looking into all the aspect of the base rate system proposed by RBI and was yet to take a final call based on asset liability situation, he said.

Asked if SBI has approached RBI for more time to migrate to the base rate regime, he said, “We do not intend to approach RBI, but possibly other banks may seek some relaxation for compliance.”

Further, he said the base rate would not translate into higher interest rate.

Asked about the merger of the State Bank of Indore with itself, Bhatt said, the merger should take place by March this year. The bank was currently seeking regulatory approval from RBI and thereafter it would go to the government for clearance, he said.