SBI to raise $1 billion through bonds; no hike in interest rates

India’s one of the largest nationalized bank State Bank of India (SBI) on Friday said that they are planning to raise about Rs 4,500 cr through bonds from overseas market next fiscal to fund growth plans. “There will an issue overseas in the next financial year. It could be around 1 billion $,” SBI Chairman O.P. Bhatt said in the Skoch event.
This fund would be raised in one overseas issue and the complete numbers or quantum would be finalized during appropriate time depending upon market condition. When the question has been raised regarding about interest rates, he said, that will remains same during the current fiscal. Unless there is significant growth in credit demand, lending rate is unlikely to rise in the next few months, Bhatt added.
All the banks to raise interest rates following a 25 basis points hike in short-term lending (repo) and borrowing (reverse repo) rates announced by the Reserve Bank of India (RBI) at its mid-quarterly review on March 17, 2011.Last month, SBI rose lending and deposit rates on select maturities by 25 basis points in response to a similar rate hike announced by the RBI in January. SBI had revised the base rate or the minimum lending rate by 25 basis points to 8.25%. Similarly, Benchmark Prime Lending Rate (BPLR) for the existing customers was also increased by 25 basis points to 13%.In addition; the bank also increased fixed deposit rates on two select maturities by 25 basis points. Both 555 days and 1,000 days fixed deposits were increased to 9.25% from 9%.