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SBI Expects 2-3 Quarters of Benefit from RBI Rate Hike as Loans Reprice Faster
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CNBC TV18•07-10-2026, 20:15
SBI Expects 2-3 Quarters of Benefit from RBI Rate Hike as Loans Reprice Faster
- •State Bank of India Chairman CS Setty expects the banking sector to benefit from the RBI rate hike over the next two to three quarters due to quick repricing of repo-linked loans and ample liquidity.
- •The Monetary Policy Committee raised the policy repo rate by 25 basis points to 5.5% and shifted its policy stance to Calibrated Tightening.
- •Setty does not foresee significant deposit rate increases in the near term because of ample banking system liquidity and limited competition.
- •Higher interest rates are not expected to sharply hurt credit growth, with inflation and inflation expectations playing a more decisive role in borrowing decisions.
- •SBI sees no major system-wide asset quality risks, despite potential seasonal pressures on agricultural loans due to higher rates or El Nino.
Key Questions Answered
State Bank of India Chairman CS Setty expects the bank to benefit over the next two to three quarters as repo-linked loans reprice quickly, while ample liquidity limits near-term pressure on deposit rates.
Setty does not foresee major system-wide asset quality risks or a sharp drop in credit growth, noting that economic activity remains resilient even though agricultural portfolios may experience some seasonal variation.
The RBI introduced interoperability between account aggregators—which SBI welcomed while noting that consent management needs attention—and established a technical consultative committee to create a structured dialogue with market participants.
