The State Bank of India (SBI) may lower lending rates soon, a top official has said.
“I am not ruling it out. It could happen in the next two-three weeks,” Pratip Chaudhuri, SBI Chairman, told newspersons on the sidelines of World Economic Forum on India meeting here on Wednesday.
The country’s largest commercial bank has a surplus liquidity of Rs 60,000-70,000 crore.
With the Reserve Bank of India recently reducing cash reserve ratio (CRR) by 25 basis points, there was some expectation that banks would reduce their lending rates.
None of the commercial banks have so far reduced lending rates post the RBI monetary policy review on October 31.
Chaudhuri said that reduction in CRR would lead to some profit increase for the bank, but this would be offset by the increase in the provisioning requirement for restructured loans.
KFA issue
On Kingfisher Airlines, the SBI Chairman said that the bank had asked the private carrier to show some progress in capital infusion.
“We are slightly disappointed at the slow pace in ensuring capital infusion. Unfortunately, till date we have not seen anything significant,” Chaudhuri said.
SBI has sought response from the airline by November 30, it is learnt. Already, Kingfisher Airlines is a non-performing asset for SBI and the bank has provided for its entire exposure of about Rs 1,500 crore.
Earlier, speaking at a plenary session at the World Economic Forum meeting on India, Chaudhuri noted that economic slowdown had upset the projections made by entrepreneurs. This had led to some accounts turning bad.
Obama win
On Barack Obama’s re-election as US President, he said “it is positive development for the Indian financial sector.”