Terming the timing of monetary tightening by the Reserve Bank as 'a bit of a surprise', country's largest bank SBI today said the apex bank may further hike its key rates in the annual monetary policy on April 20, if inflation remains high in March as well.
SBI Chairman O P Bhatt also said the lender would wait for the RBI's April policy to decide on raising its lending rates.
"Whether they (RBI) would do something more in April policy . . . by that time one more set of results would have come out for inflation. Possibly it (key policy rate hike) will depend on that," Bhatt told reporters on the sidelines of Infrastructure Conference organised by the Planning Commission in New Delhi.
Commenting on the RBI's decision to increase short-term lending and borrowing rates by 25 basis points each last week, Bhatt said the timing was a bit of a surprise and it only shows that the central bank is worried about inflation.
With a view to arrest inflation, the RBI on Saturday upped its repo and reverse repo rates (short-term lending and borrowing rates) to 5 per cent and 3.75 per cent, respectively.
Asked if SBI would increase lending rates following the RBI's move, Bhatt said, the banks would wait till the next policy review.
"We would like to wait till April policy as far as interest on lending side is concerned and if you wait for April policy that means the earlier we would like to change our rates, cannot be before May," he said.
On Monday, RBI Deputy Governor K C Chakrabarty had said timing of the the central bank was right in raising its short-term key rates.
RBI Governor D Subbarao had said the monetary tightening was needed to make growth sustainable as inflationary pressures were stronger than it had anticipated.
Inflation rose to 9.89 per cent in February from 8.56 per cent in January, breaching the RBI's projection of 8.5 per cent by March-end.
