Navi Mumbai: RBI will have more room to cut repo rate if monsoon continues to progress at the current pace and inflation is kept under control, State Bank of India (SBI) Chairman Arundhati Bhattacharya today said.
“If the monsoon performs as it has been currently performing and we are able to keep inflation down, then there is headroom for cuts,” Bhattacharya told reporters at the golden jubilee celebration of All India State Bank Officers' Federation here.
She said SBI has already cut the base rate and further reduction will depend on “several other things”. SBI has already slashed its base rate by a cumulative 0.30 per cent in two moves over the last quarter as an answer to RBI's repo cuts of 0.75 per cent.
RBI, which has an explicit inflation control mandate, has marked the monsoon as a major concern in its guidance on the policy.
In numbers released yesterday, inflation inched up to 5.01 per cent for May.
On waiving processing fees if a customer shifts his home loan to SBI, Bhattacharya said the bank is trying to increase its market share through the offer. “We are expecting a good response for this offer,” Bhattacharya said.
When asked about whether there was some discussion over recapitalisation in yesterday's meeting between PSU bank chiefs and Finance Minister Arun Jaitley, she said the minister has assured of more capital.
“The Finance Minister said the demand which banks have made for more capital has some basis to that. When the economy is looking to grow, we need growth capital. The growth capital is not so much available as we today have regulatory capital,” she said.
She said so far SBI has not sought any funds from the government this fiscal.
Advising against resting on one's laurels, she said “being no. 1 is not sufficient and employees should strive hard to sustain the top position”.
The Federation, on its part, cautioned against implementing various recommendations of the P J Nayak committee on bank governance and wants the state-owned character to continue.
“We are also cautious about the recommendations of P J Nayak Committee which aim at dilution of control of the government and participation of private sector in managing regulation of PSBs,” Federation's General Secretary Y Sudarshan said.
“We firmly believe in the continuation of the ownership by public sector banks in the country.” Sudarshan also made a reference to a report of the Narasimhan committee vis-a-vis privatisation of public sector banks and the successful opposition to it. The Federation has more than 90,000 employees from SBI and its five associate banks as members.
