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No truth in report that SBI will be asked to take stake in Yes Bank, other weak pvt banks, says CFO Prashant Kumar

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Whenever there is a problem in any of the entities in the financial sector, immediately the people come to conclusion that SBI will be asked to bail out, said Prashant Kumar, Deputy Managing Director & CFO of State Bank of India (SBI).

Clarifying about reports doing the rounds that SBI would be asked to take over other weak private banks, Prashant Kumar, Deputy Managing Director & CFO of State Bank of India (SBI) said these are just speculations. "Whenever there is a problem in any of the entities in the financial sector, immediately the people come to conclusion that SBI will be asked to bail out. I think these are unfounded speculations,” he said.
There are is no truth to the reports that SBI will be forced to take a stake in Yes Bank or other weak private sector banks or small PSU bank, these are all speculations, he confirmed in an interview with CNBC-TV18,
Talking about reduction in their Marginal Cost of Funds based Lending Rate (MCLR), he said, “Last month we reduced the rate of interest on our fixed deposits across all tenures and that has resulted into a 10 basis points reduction in the MCLR, which is now effective from December 10,” he said.
The Reserve Bank of India has reduced rates by 135 basis points and we have reduced rates by 65 basis points, he said.
When asked they would consider deposit rates because of excess cash, Kumar said, “Everybody is sitting on excess cash, and we are also sitting, but reducing deposit rates further is an issue which I think only consider next month. However, this time we considered it and decided not to reduce. The reason being that today one-year fixed deposit is only 6.25 percent. If we reduce it further, it would definitely impact large section of our population who are dependent on the interest income from their deposit.”
However, he does not see any impact of reduction in MCLR on net interest margin (NIM).

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