Interest rates have stabilised,says SBI chief

Countrys largest public sector bank State Bank of India SBI today said that interest rates should start declining soon as they have stabilised. It further said that apart from tightening the monetary stance there are other measures that can be taken to rein in inflation. Talking about the impending annual policy review by the Reserve Bank of India,SBI chairman Pratip Chaudhuri said that he hoped the central bank would strike a balance between controlling inflation and promoting growth.

Interest rates have stabilised and there should be some deceleration from now on, Chaudhuri said while attending the annual performance review meeting of state-run banks with the finance ministry. He further said that SBI plans to launch its Rs 20,000 crore rights issue this year to augment its lending operation. The bank is in dialogue with the government and the proposed rights issue should happen this year, Chaudhuri said. SBI had earlier announced its intention of coming out with the rights issue in the previous fiscal.

On the plan to merge associate banks of SBI,Chaudhuri said that the bank was working on it and will initiate something this year. SBI would prefer to merge associate banks where SBI holds 100 per cent,rather than where the holding is less. SBI has five associate banks State Bank of Bikaner and Jaipur,State Bank of Travancore,State Bank of Patiala,State Bank of Mysore and State Bank of Hyderabad. Among these the State Bank of Bikaner and Jaipur,State Bank of Mysore and State Bank of Travancore are listed companies.