Chairman of State Bank of India (SBI) Pratip Chaudhuri said on Saturday the asset liability committee (ALCO) of the bank will meet in early December to take a call on base rate cuts.
Speaking on the sidelines of the Bancon 2012 summit, Chaudhuri said: “In the ALCO meeting held last week, we decided not to change base rate as it is the lowest in the industry. But such things are kept under consideration. So next time we meet in the first week of December, after we get the November net interest margin (NIM) numbers, ALCO will take a call,” he said. SBI’s base rate is 9.75% at the moment.
The bank last cut its base rate in mid-September by 0.25% following the CRR cut in the mid-quarter policy review. The bank has also cut lending rates in select segments, like home, auto and SME loans in recent times. Chaudhuri added that deposit growth has been particularly good for SBI, but there is not enough credit deployment. “So that is why we have lowered our deposit rates and tried to ramp up credit growth,” said Chaudhuri. He added that the slow credit growth is primarily due to the weak loan demand on the corporate side. Retail loan growth, however, continues to remain strong.
On Kingfisher, Chaudhuri said the company has given SBI no further updates since the USL and Diageo deal. “There are reports on their group companies, but that cannot be a basis for forming a view,” he said.
Chaudhuri said they will hold discussions with the finance ministry next week on the much-delayed rights issues plan of the bank, but did not detail the size of the issue. Last year, it was planning to launch an over R20,000-crore issue.
“We will have a consultation with the finance ministry officials next week on the rights issue because they have to give their share in the rights issue,” Chaudhuri told reporters on the sidelines of Bancon 2012 on Saturday.