Mumbai: Amid fears of pressure on margins of banks in the prevailing high interest rate scenario, the country's largest lender - State Bank of India – on Monday said it is actually witnessing an improvement in its net interest margin (NIM).
"The NIM is overall improving. Yes, there has been some increase in the cost of funds but it has been more than compensated by the yield on assets," SBI Chairman Pratip Chaudhuri told reporters after the bank's 56th annual general meeting here.
On whether SBI is witnessing a slowdown in demand for credit following the repeated rate hikes, he said, "There is no pick up. There is no deceleration either. Companies are going slow on expansion plans. Retail is more affected as the EMIs go up...mid corporates are also affected."

In efforts to tame inflation, the Reserve Bank has raised key policy rates 10 times since March 2010, the last being a 25 basis points increase on June 16. During the last monetary
policy announcement, the apex bank also hinted at going in for more hikes if the inflation - already at an uncomfortable level of 9.03 per cent in May - remains high.
SBI's ALCO (asset liability committee) will be meeting this week to take a decision whether to hike rates or not, Chaudhuri said.
"We have not seen any pressure on our borrowing costs so far. If it is (found to be) too small a requirement (to increase rates), they will not go through with that (rate
hike)," he added.

On SBI's much delayed rights issue, through which it intends to raise Rs 20,000 crore, Chaudhuri said it will come out "by third quarter" (ending December).
SBI will work on the proposal for two weeks and will then discuss the structure of the issue with the Government, he said.
Asked about Institute of Chartered Accountants of India's (ICAI) sending SBI a notice over the higher incidence of provisioning reported in the March quarter, Chaudhuri said the
accounting regulator has no "locus standi" to question the bank which is governed by the RBI.
Moreover, he stressed that RBI Deputy Governor Shyamala Gopinath, who is a member of the SBI Board and also part of its audit committee, is "fully appraised" of the situation and
all the adjustments have been done as per "rules and regulations".