SBI mulls raising key rates in a few months

State Bank of India (SBI) announced today it might raise key interest rates in the next few months, even as it awaited a direction from the Reserve Bank of India’s (RBI’s) annual monetary policy announcement on April 20.

On the sidelines of a meeting here, SBI Chairman OP Bhatt said, “We will wait for the April policy and then decide (whether to increase lending and deposit rates). At the moment, there is enough liquidity in the system and the situation is likely to remain so for the next few months. The rise will not happen immediately. We have to wait for the RBI decision.”

Bhatt said there was no immediate need for the bank to raise capital. “There is no urgency (to raise money). But, we might have to raise capital in the medium to long term. My preference will be a rights issue, as I would like to the government to retain its holding. We will see when the time is right for the market.” He added the bank was planning to raise Rs 10,000-20,000 crore.