State Bank of India, the country’s largest commercial bank, expects the Reserve Bank of India to keep policy rates unchanged at its upcoming monetary policy review on August 9, its Chairman Arundhati Bhattacharya said.

Also, the monsoon this year is expected to help soften inflation rates further, although the full impact would be seen only after a month, Bhattacharya told newspersons here.

The August 9 monetary policy review will be the last by the incumbent RBI Governor whose term ends on September 4.

After this date, policy rates are likely to be determined by the monetary policy committee based on inflation targets notified by the Centre.

Economists point out that the June consumer price inflation of 5.8 per cent was close to the upper end of RBI’s target of 4 per cent (+/- 2 per cent) and hence, the RBI may keep policy rates unchanged on August 9. Meanwhile, responding to a question on the merger of associate banks with SBI, Bhattacharya said that efforts will be taken to complete the merger by the end of this fiscal.

Capital infusion On how the SBI proposes to use the Centre’s proposed capital infusion of ₹7,575 crore, she said this would be used as growth capital. The capital adequacy of the bank will go up by 57 basis points post capital infusion, she added.

Bhattacharya parried questions on media reports of her name being considered for the position of RBI Governor.

“I am not saying anything. You people are the ones who have been speculating. You people have been writing about it. Have I ever said anything (on the issue)?” she asked.

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