SBI chairman sees no deposit rate hikes for three months
In short
SBI chairman C S Setty said on Thursday that banks may not raise deposit rates for about three months.
He blamed excess liquidity in the system and said RBI tightening could help bank margins. The report does not say if other banks will follow SBI’s view.
What the reporting says
State Bank of India chairman C S Setty said on Thursday that deposit rates are unlikely to rise for the next three months because of excess liquidity in the system. He also said RBI tightening could support banks’ net interest margins for up to three quarters and that credit growth may stay at 14% to 15%. The immediate implication is some relief for banks’ margins, while the future path for deposit pricing still depends on liquidity and credit growth.
Why it matters
SBI chairman C S Setty said there may be no deposit rate hikes for up to three months because of excess liquidity. He also said RBI tightening could help banks widen net interest margins for up to three quarters, and that credit growth may stay at 14% to 15%. The comments matter for depositors and banks, but the reporting does not specify any policy change beyond his forecast.