Monday, September 17, 2012

SBI voices concern on inflation, credit growth

Kolkata, September 14: State Bank of India, the country’s largest public sector bank, does not expect an immediate cut in interest rates and Cash Reserve Ratio, as inflation is still high and liquidity at a comfortable level.

“A CRR cut is in the wish list for every bank. Any time when CRR is cut, banks add to their bottom line. But if liquidity is the determining criterion, then I do not see a CRR cut today,” said managing director and chief financial officer Diwakar Gupta on the sidelines of a CII seminar.

Inflation, measured on the basis of the wholesale price index rose to 7.55 per cent in August, driven by higher prices of potatoes, wheat and pulses, which rose due to poor rainfall. “Inflation is continuing to rise. In such a situation, how can a monetary authority reduce interest rate, without any indication of inflation coming down?” said Gupta.

Meanwhile, credit growth was not keeping pace with deposit growth. “Credit growth is...


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