Lending rate hike imminent: Bhatt

Country's largest lender State Bank of India (SBI) on Friday said it will be raising its lending rates very soon on the back of a rise in its cost of deposits.

"They (lending rates) were raised about two months ago. There has been a huge pressure on liquidity and its not just getting tighter, but liquidity has become more volatile in the system," Chairman O P Bhatt said.

"I think the interest rates will go up on the lending side," he added.

The bank will also be raising its base rate this quarter, Bhatt said, adding, the low cost of deposits witnessed through the September quarter is hardening, as a result of which the bank will have to raise the lending rate.

SBI is amongst the few lenders who did not increase its base rate after the Reserve Bank's mid-quarter policy review on September 16.