Friday, August 3, 2012

Unable to pass rate cut benefits to old borrowers: SBI

Mumbai, August 2: On Wednesday, State Bank of India had cut home and auto loan rates to the lowest in the market. Speaking to CNBC-TV18, Diwakar Gupta, MD & CFO, SBI said the rate cut will stimulate demand for homes and autos but won’t impact the company’s margins in a big way.

He, however, said a base rate cut at this point is not possible, but if liquidity situation improves with the release of SLR securities, then a case of deposit rate cut can me made. “(There are) liabilities also, if I cut deposit rates, I don’t cut them on deposits that I have already taken. So though it looks a little unfair. I think it is unfair to expect that,” he said. Below is an edited trancript of the interview.

Q: This will be a pressure on your margins; it isn’t as if the cost of money has come down?

A: We have been trying to see how we can reduce rates in general. The expectation is that eventually the rates will reduce but even if...


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