Interest rates to remain high: SBI

Bank plans to open 60 branches in region; launches new car loan product 

 Chandigarh, September 9State Bank of India (SBI), the country’s largest lender, has said that lending rates would continue to be high in the wake of spiraling inflation.
“Interest rates are likely to remain high because inflation is high ... till such time, inflation is high, Reserve Bank finds it difficult to lower the interest,” SBI Chairman Pratip Chaudhuri said.
Describing pre-payment penalty as an anti-customer step, the SBI Chairman said that the bank had already waived such penalty on floating loans two months back.
The Bank plans to add over 800 branches within the country. It will also open a foreign subsidiary in Australia, besides a new branch in Doha.
“We have a network of over 12,000 branches, and we are looking at adding over 800 new branches. We will be adding 60 new branches in the Chandigarh circle,” he added.
He added the Bank was also looking to increase the number of circles, from the present 14 to 17.
“Banks should be doing well because the country is growing at 8 per cent. We think our deposits and loan growth should grow by 20 per cent in this fiscal,” he said.
"We are coming out with a product for car loan in which EMI will be Rs 1,700 per lakh. If someone taken a loan of Rs 3 lakh then he will pay close to Rs 5,000 as instalment," he said, adding, "interest will also be calculated on daily balance."
Asked about its Rs 20,000 crore right issue to fund its expansion plans, Chaudhuri said, "it is very much there and it should happen next month or so."
This will allow the bank to raise capital from the market and fund its expansion plans.
On the merger of SBI with associate banks, Chaudhary said that the Bank was likely to go in for the merger of two Banks, including State Bank of Patiala, by next year.
"Each merger requires a lot of cash flow, and we will be able to go ahead with the mergers only next year,” he said. — With Agency Inputs