Interest rate cycle has peaked: SBI chief

Claiming that interest rate would remain stable in the short term, State Bank of India chairman O P Bhatt today said the interest rate cycle has more or less peaked.

"The interest rates have more or less peaked," he said on the sidelines of Pravasi Bharatiya Divas here.

When asked about the liquidity position, the SBI Chairman said there is slight pressure on liquidity, but there was no shortage of credit for the 'productive sector.'

There are various instruments at bank's disposal to improve liquidity crunch, he said.

The country's largest commercial bank had last month hiked its benchmark prime lending rate (PLR) by 0.5% to 11.5% following the RBI's move to increase Cash Reserve Ratio (CRR).

Referring to Finance Minister P Chidambaram's proposal to utilise part of foreign exchange reserves for infrastructure, he said, it was a good idea, but banks would have to wait for the fine print of the government's policy in this regard.

The finance ministry has set up an expert committee headed by finance secretary Ashok Jha to work out a road-map for the utilisation of forex reserves for the infrastructure sector.