Some impact of rate hike will be on MSME sector: SBI MD

“Retail loans for most banks including us are linked to the repo now as the external benchmark. So while we have not taken a call now and our asset liability committee will meet shortly to take a call, we have seen some banks already hiking these rates. It is a natural thing that the pass through will happen and so those rates will go up and therefore the EMIs will also go up,” says Ashwini Kumar Tewari, MD, State Bank of India.

The 40 bps rate hike came just a month after RBI was fully comfortable about the situation including inflation. What do you think has changed dramatically since then to now?

RBI made it clear that even in the last meeting, they will be driven by data which is coming and the situation is extremely volatile because of the war in Ukraine and therefore the resultant hikes in the oil price and also the commodity prices and edible oil all of which are important variants, important ingredients into the India’s inflation number.

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