State Bank of India (SBI) Chairman O P Bhatt today said lending rates are unlikely to rise in the next 3-4 months as hiking rates in a low-demand scenario could hurt the margin of the bank.
"That (increasing lending rates) may not happen till May-June till the liquidity surplus goes away from the system," O P Bhatt told reporters on the sidelines of an event here.
Bhatt hinted that the State Bank is also unlikely to increase the interest rates for its depositors in the near future.
After the RBI hiked the amount banks have to park with it, at least two banks--HDFC Bank and IDBI Bank--have raised their deposit rates--a trend that could be followed by other banks in the coming days.
SBI has a liquidity surplus of around Rs 75,000 crore and its maintenance cost had adversely impacted its third quarter numbers.
On base rates, which will serve as a floor below which banks will not be allowed to lend, Bhatt said banks have sent a "collective feed back" to RBI, where they have cited some implementation issues, particularly in the priority sector and staff loan segments.
