SBI not to be affected by absence of new bond issues: CMD
State Bank of India will remain unaffected by virtual absence of bond markets, CMD Pratip Chaudhuri said on Wednesday.
Kolkata: State Bank of India will remain unaffected by virtual absence of bond markets, CMD Pratip Chaudhuri said on Wednesday.
"The bond market is dead. Neither the Centre or state governments are able to come up with new issues. Banks which rely on short-term funding may be hurt. Banks like us where 99 percent of the funding is from retail sources will not be affected," he told reporters after the bankers meeting with Finance Minister P Chidambaram here today.
He said there was some tightness of liquidity and many people were encashing their investments in liquid mutual funds.
"They are now coming to banks. In fact, SBI has received Rs 5,000 crore to Rs 6000 crore in the last few days," he said.
To a query, he said that there would be no hardening of rates, adding that the recent measures adopted by RBI should not have any long term impact.
Chaudhuri said of the existing five associate banks of SBI, one would be merged during this financial year and a committee was working on it.
He said that since State Bank of Patiala and State Bank of Hyderabad are wholly-owned, no capital would be required for their merger unlike others as funds were required for their buy-outs.
Chaudhuri said that the RBI move to give new bank licenses to corporates was a welcome move.
SBI's additional increase in cost would be Rs 10 lakh per employee of the merged entities of associated banks.