State Bank of India (SBI) is likely to reduce lending rates on select retail products in the festive season, Arundhati Bhattacharya, newly appointed chairperson of the bank, said on Tuesday. Speaking at her maiden press conference after taking over as the SBI chief, Bhattacharya said this year's festive season discounts will not be much different from the last, though interest discounts on home loans were highly unlikely.
“There is absolutely no direction (from the government) that you must do this, there is no pressure on us. It is only a suggestion given by the government as to whether we can look at these schemes as ways to reduce the interest burden on the common man," she said, talking about the recent announcement by the finance ministry of increased capital infusion into public sector banks owing to the festive season.
SBI MD A Krishnakumar confirmed the bank had tweaked some of these retail products and is awaiting the government's view before making a final annoucement. Krishnakumar, however, said that a reduction in home loan rates is unlikely.
SBI had raised base rate by 10 bps last month, increasing it to 9.8%, after RBI’s liquidity control measures significantly increased the cost of funds for banks.
Talking about deposit rates in the bank, Bhattacharya said though it was possible that deposit rates will come down, the decision will have to be taken at SBI's assets and liability committee (Alco) meeting. The hope for a reduction in deposit rates follows the RBI's decision to ease liquidity and cut the marginal standing facility rate by 50 bps to 9%.
"We would like to use more weapons like our IT systems, rationalised structures and a reduction in time span for NPA resolution, in this war," she said, adding that controlling NPAs would remain a top priority for the bank. She added that with the economy under stress, some amount of stress on the bank balancesheeet is to be expected.
In her tenure as SBI's chairperson, Bhattacharya said that she would also look at improving productivity of the bank, while also ensuring that employees are well trained with the product offering.