How will RBI’s decision to increase repurchase rates impact loans and repayments? SBI MD Ashwini Tiwari Exclusive Chat with Anil Singhvi


In an exclusive chat with Zee Business Editor, State Bank of India (SBI) Managing Director Ashwini Tiwari said the decision by the Reserve Bank of India (RBI), in which it increased the repo rate of 50 basis points, is broadly in line with expectations . He said the decision is aimed at curbing the soaring inflation chart which remained beyond the central bank’s tolerance level.

“No impact of the hike is so far visible on loan growth and disbursements, nor on loan repayment,” he said.

Today’s hike is the third consecutive increase in the key rate by the RBI since May, when the central bank hiked the interest rate in an off-cycle policy meeting.

“The translation of EMIs into retail loans has been built over a period of time and we have seen three increases since May and only two months have passed so far,” the managing director said while confirming that there would be “no impact on lending and related growth as currently seen”.

Tiwari said the transmission of rate hikes takes time, with respect to deposits, because rates rise with a lag, while loan rates rise according to external benchmarks in the system.

Stating that India’s economy is strong and resilient, the SBI MD said: “We haven’t seen the impact of the rate hike on growth either on wholesale or retail – growth is rather on an upward trajectory”.

Regarding bond yields, Tiwari claimed that the rise in rates had an impact on the SBI’s bond portfolio, which is quite large and the available-for-sale category that falls under mark-to-market is also huge.

The 10-year bond yield is down from June 30, 2022 levels and we have improved our position, the SBI MD said, adding that the rate hike had already been made in the June quarter of this fiscal year. .

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