SBI rates to remain stable: Bhatt

Interest rates are likely to go down or remain stable in the next three-six months, according to OP Bhatt, chairman of State Bank of India, the country’s largest lender.

Speaking after inaugurating a corporate accounts branch here, he said interest rates were likely to keep going down. “It is not possible to predict interest rates on a long-term basis,” he said.

The bank has, in the past few months, reduced rates across categories and given incentives for new customers. The credit offtake this fiscal has been good so far and the retail sector, particularly home loans and automobiles, are seeing good traction. There are signs of revival in the retail segment and the bank plans to double the quantum of retail lending. Last year, the bank lent more than Rs 1,000 crore a month to the retail segment, Bhatt said.

Though the first quarter has seen a muted response from large and mid-sized corporates, SBI was optimistic of credit offtake from these increasing in second and third quarters.

The credit growth rate on a year-on-year basis was about 23 per cent annually and this year it might be 25 per cent, Bhatt said.

SBI has created a corpus of about $1 billion (about Rs 5,000) for its infrastructure development fund and will mop up another $2 billion (about Rs 10,000 crore) in about two years in phases.

Though acquisitions were not on the immediate agenda, Bhatt said SBI had been receiving some offers from international banks.

“We are evaluating if they fit into out asset classes. We are not in a hurry to close the deals,” he said, adding the markets were now giving realistic valuations. The bank was at present focussing on organic growth of its overseas business, he said.

Bhatt said there might be a drop in the recovery rate if the present drought conditions continued for some time.