September 26, 2009

The State Bank of India does not expect interest rates to go up in the near future, in sync with the government’s stand of continuing with a low-interest rate regime till the signs of global economic recovery become stronger.“Borrowing rates are not likely to see any upward trend in the near future,” said .P. Bhatt, chairman of the SBI.While most PSU banks lend at 11.75-12.25 per cent, with Delhi-based Punjab National Bank offering the lowest prime lending rate of 11 per cent, private banks such as ICICI Bank, HDFC Bank and Axis Bank lend at12.75-16 per cent.

Earlier this week, finance minister Pranab Mukherjee had said he was against a tight money policy. “We are not prescribing the introduction of a tight money policy at this juncture till the global economy, especially the European and the US economies, shows sufficient signs of recovery,” the minister had said Reserve Bank of India governor D. Subbarao recently said the central bank would not reverse its soft money policy unless it was “sure” about the economic recovery.