State Bank of India can increase rates if warranted said Ashwini Kumar Tewari, MD, SBI, in an interview with ET Now.
Tewari, while talking to ET Now after the RBI MPc outcome, underscored that the bank had been increasing deposit rates in different maturities, responding to the factors including the growth in the system.
"We will surely look to increase rates if they are warranted. This policy is in tune with all these data points separately from the banks and from the market at large. It is responding to this. We are also happy with the HTM announcement which was expected, but till it is made, we cannot talk about it. So now that it has been made 23 percent, it will give us a lot of headroom for payment against the provisions and also buy more securities if needed," said Tewari.
After the first bi-monthly policy meeting of FY23 on April 8, the RBI governor Shaktikanta Das said the MPC unanimously voted to leave the repo rate unchanged at 4 percent and keep the stance accommodative.
Das also said RBI will restore the liquidity adjustment facility (LAF) corridor to 50 bps, as it was pre-Covid. MSF rate and bank rate remain unchanged at 4.25 percent, the governor said.
RBI also announced the introduction of the standing deposit facility (SDF) at 3.75 percent to suck out the surplus cash from the economy.
"While the SDF would serve to absorb liquidity, the MSF would inject liquidity. The access to the SDF and MSF would be at the discretion of the banks as opposed to the repo and reverse repo, which would remain at the discretion of the RBI. The SDF has the twin objective of liquidity management and financial stability," said Shivaji Thapliyal, Lead Analyst – Institutional Equities, YES SECURITIES.