State Bank may increase interest rates again

July 1st, 2008 - 1:33 pm ICT by IANS  

New Delhi, July 1 (IANS) India’s leading public sector bank, the State Bank of India (SBI), could once again increase its interest rates including that for loans for housing and consumer durables, its chairman O.P. Bhatt indicated here Tuesday. “Further hike in PLR (primary lending rate) isn’t ruled out,” Bhatt told reporters on the sidelines of a function.

Spelling more gloom for borrowers, Bhatt indicated SBI would also increase its home loan rates shortly.

“We will revise the home loan rate in a week’s time,” he told reporters.

SBI had hiked its PLR by 50 basis points June 26, taking it to 12.75 percent and made loans costlier. It came in the wake of the central Reserve Bank of India (RBI) increasing both its short-term lending rates and the minimum cash commercial banks such as SBI have to hold against deposits.

Asked if RBI could take some more fiscal measures to rein in inflation that reached a 14-year high of 11.42 percent for the week ended June 14, Bhat said: “It’s difficult to say, RBI may take action if the fresh figures of inflation show upward trend.”

The latest status of India’s annual inflation will be known July 4.

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