According to Ms. Shikha Sharma, Managing Director & CEO, Axis Bank, lending rates in the banking industry is poised to move up as loan demand has returned and liquidity is drying up but the hike will not happen 'overnight'. Market participants expect a steady rise in the interest rates in the industry on account of host of factors such as vanishing surplus liquidity, return of credit demand and expected policy tightening by the RBI later this month.
The trend is already visible with a few banks, including leading public-sector lender, Union Bank of India, recently hiking their deposit rates with a view to retain the investor interest.
Reiterating his earlier stand, State Bank of India Chairman O P Bhatt said that SBI will not hike its lending rates immediately but will wait for further signals from the Reserve Bank's forthcoming annual monetary policy.
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