Interest Rates Will Not Rise In Near Future, Says SBI

Interest Rates Will Not Rise In Near Future, Says SBIIn a declaration, the State Bank of India announced that the bank's interest rates would not be going up in the coming future, as there is sufficient liquidity in the banking system and credit off take is generally small in the April-June quarter.

SBI chairman O. P. Bhatt said, "At the moment there is fair amount of liquidity in the system. Secondly, the quarter in the financial year, which traditionally in India is supposed to be lean quarter for building up credit."

"If there continues to be sufficient liquidity in the system. The chances of credit interest rate going up in the near future are not there but having said that hopefully the credit growth will pick up,' Mr. Bhatt added.

The central bank of India (RBI) increased key interest rates plus CRR for banking institutions by 25 basis points each, as expected, in order to drain further liquidity from the economic system.

According to the reports, SBI said that it is eyeing to clock around 23% increase in credit offtake in this financial year and showed hope that bad loans would decline as the agriculture segment recovery gains momentum.

India's biggest lender registered only 18% credit growth in 2009-10.

On non-performing assets, Mr. Bhatt said, "Rate of formation of NPA is coming down and if the recovery of agriculture sector is good, it would come down further." (With Inputs from Agencies)