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Our Bureau

Mumbai, Jan. 23 Interest rates are not expected to rise and may remain the same, said Mr O.P. Bhatt, Chairman, State Bank of India.

The Chairman said that in case the RBI maintains status quo on interest rates in the monetary policy, it would mean that there would be no further rise in interest rates in the banking sector.

Mr Bhatt said that a cut in interest rates by the US Federal Reserve does not mean “automatically” that there would be a downward revision in the rates here since the factors in India were different from those in the US.

“That is the resilience of the Indian economy,” he told reporters on the sidelines of a seminar on corporate governance.

A recession in the US would push corporates there to cut costs and offshore their activities to India. This would bring in more business for India, he said.

On the volatility in the Indian stock market, Mr Bhatt said that there was no fundamental change in the Indian economy, which continued to grow at a high rate.

All the sectors were performing well and there was enough liquidity in the system.

The SBI Chairman also said that the bank’s rights issue for Rs 16,700 crore, planned in February, was on track and would go through successfully.

“We have priced it at a 35 per cent discount at Rs 1,600. We priced it at this level because we wanted to make sure that in case of any volatility in the market, there will be a significant discount which will attract the investor,” Mr Bhatt said.

SBI will continue to hold discussions with the unions to iron out issues concerning the merger of the six associate banks with itself.

The Government’s approval for the merger of State Bank of Saurashtra with SBI was still awaited, Mr Bhatt said.

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