The Hindu Business Line : Rate hike: SBI board to meet next week

State Bank of India's (SBI) decision of August 1 to hike its prime lending rate (PLR) by 25 basis points would now be referred to its board next week for approval, its Chairman, Mr O.P. Bhatt, has said.

The move comes in the wake of the Finance Ministry's advice to public sector banks to consult their boards before they go about increasing their lending rates.

"We (board) will be meeting next week. This issue will be placed before the board," Mr Bhatt told presspersons when asked about the Ministry's communication to PSBs on this issue.

The SBI Chairman said the bank's asset liability committee had recommended a 0.25 per cent increase in PLR on August 1. The rate hike had come into effect from August 2.

The Finance Ministry is of the view that the Government as a majority shareholder in PSBs has a right to be informed about lending rate hikes. As the majority shareholder had a view on such decisions, it had to be taken at the board level before they are finalised and not left to the asset liability committees alone.

More Stories on : Interest Rates | Public Sector Banks | State Bank of India

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