Will interest rates go up after the Reserve Bank of India’s move to hike short-term rates like repo and reverse repo? Though Finance Minister P. Chidamabaram ruled out any possibility, a section of bankers feel that there could be some upward pressure on interest rates in the short-term.Bankers warn of a hike in interest rates for some categories of borrowers on housing, personal and car loans with some banks indicating an upward review of lending rates for deeply-discounted consumers in the coming months. A senior official at SBI said all the lending rates in sub-PLR segments will be revised upwards.While the guarded response does not indicate an across-the-board rise, bankers are obviously leaving some room for the possibility of a revision. Union Bank CMD K. Cherian Varghese feels corporate lending rates may go up in short-term. ‘‘Corporate lending rates may go up in the short-term and they have to shell out something more,’’ he said.Bank of Baroda CMD A.K. Khandelwal said, ‘‘There is no indication of change in base primary lending rates (PLR) but the bank will review its sub-PLR rates.’’Indian Bank CMD K.C. Chakrabarty said, ‘‘It is a positive-growth driven policy. We are not looking at a hike in lending rates immediately as most of our customers are mainly small and medium enterprises.’’Deposit rates are also likely to go up. Asked about increasing deposit rates in the bank, Khandelwal said obviously there would be some changes in deposit rates and the bank would look very seriously at interest rates.Questioned about new policy’s impact on the credit offtake of the bank, BoI CMD Balachandran said it would have no impact.Deregulation of sb deposits on the cardsMUMBAI: The Reserve Bank of India (RBI) is looking at the possibility of deregulating savings bank deposits. The central bank has asked the Indian Banks Association to set up a technical group for reviewing deregulation of interest rates on savings bank deposits and lending rates on small loans up to Rs 2 lakh. Currently, SB deposits — which get only 3.5 per cent interest rate — are regulated by RBI. It deregulated rates on term deposits a couple of years ago. ENS
