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Updated: March 21, 2010 01:58 IST

SBI reaches new milestones

Special Correspondent
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NEW LANDMARKS: State Bank of India Chairman O P Bhatt at the inauguration of the bank's branch and ATM in Mumbai on Saturday. Photo: Paul Noronha
NEW LANDMARKS: State Bank of India Chairman O P Bhatt at the inauguration of the bank's branch and ATM in Mumbai on Saturday. Photo: Paul Noronha

The Reserve Bank of India is likely to tighten the monetary policy further by raising the indicative rates in the forthcoming Annual Policy 2010-11, State Bank of India Chairman O. P. Bhatt said here on Saturday.

“There may be some more tightening in the offing,” Mr. Bhatt said after the inauguration of the SBI's 1,000th branch and 10,000th ATM here in the current financial year. With this, SBI now has 12,448 branches and over 21,000 ATMs.

The Reserve Bank of India (RBI) would announce its Annual Monetary Policy for 2010-11 on April 20.

In an unexpected move, the RBI raised the indicative short-term rates (repo and reverse repo rates) by 25 basis points each on Friday. It raised the repo rate by 25 basis points from 4.75 per cent to 5 per cent and the reverse repo rate also by 25 basis points from 3.25 per cent to 3.5 per cent with immediate effect.

These measures were expected to anchor inflationary expectations and contain inflation, RBI noted while raising rates. “As liquidity in the banking system will remain adequate, credit expansion for sustaining the recovery will not be affected,” RBI added. Citing plenty of liquidity in the system and slow credit growth, Mr. Bhatt said he did not see any immediate need to raise the rates. However, the premier bank would wait for further signals from the central bank

Mr. Bhatt said SBI would target a 20 per cent credit growth in the next financial year. The bank also planned to open more than 1,000 branches in the next fiscal.

PTI reports:

On bank's plan to acquire a majority stake in Tata Motors Finance, Mr. Bhatt said the lender was now awaiting the RBI's nod to acquire up to 30 per cent stake in the Tata Group entity.

“We have written to the RBI. We are waiting for their response,” Mr. Bhatt said.

Eyes stake in Tata co

SBI is eyeing around 30 per cent stake in the vehicle financing arm of Tata Motors as acquiring a stake beyond that level would require approval from the government. “To acquire beyond 30 per cent we have to go to the government for clearance. So we will take somewhere between 20 and 30 per cent. That means we need the approval only from the Reserve Bank,” Mr. Bhatt said.

On part financing the Bharti-Zain deal, Mr. Bhatt said the bank had not committed any loans to Bharti, although it had been discussing the issue with the telecom major.

Last month, he had said the acquisition of Tata Motors Finance would enable SBI to strengthen its presence in the commercial vehicle segment and particularly to gain synergies in the bus and trucks business.

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