"Right now we are not raising the rates," he told reporters after announcing the bank's first quarter results.
    
SBI net profit fell 13.6 percent to Rs 3,241 crore, still making it the third largest profit-making company after Reliance and ONGC.
    
He said the bank was sitting on excess liquidity of around Rs 70,000 crore, out of which around Rs 20,000 crore came in after the liquidity tightening by the Reserve Bank to protect the tottering rupee.
    
Chaudhuri, however, parried a specific question about as to how long would the bank be able to hold on to low rates. At 9.7 percent, the base rate of the State Bank of India is the lowest in the industry.
    
He reasoned that unlike some of its peers like Yes Bank and HDFC Bank, which have hiked their interest rates over the past fortnight, SBI does not depend on short term funds.
    
"We are not funding our assets with short-term funds from the bond market. We are funding them with savings bank deposits, which is the cheapest source of funds, and fixed deposits which are also of a relatively long tenor," he said.
    
Banks which borrow short and are lending long have a comparative disadvantage in a situation like this, Chaudhuri said.
    
The comments come within days of two private lenders -- Yes Bank and the second largest private sector lender HDFC Bank -- hiking their minimum lending rates following Reserve Bank's last month move to squeeze liquidity.
    
For HDFC Bank it is a climb back to the higher level as it had earlier slashed its base rate to 9.6 percent. Its current base rate is 9.8 percent, 10 bps higher than SBI's.
    
Others like Axis Bank and foreign lender Deutsche Bank have also hiked their deposit rates, generally seen as a precursor to a lending rate increase.

(Agencies)

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