SBI's Dinesh Kumar Khara Predicts Southward Move in Deposit Rates

State Bank of India (SBI) Chairman Dinesh Kumar Khara forecasted a downward trend in deposit rates in the medium term. He also hinted that the Reserve Bank of India (RBI) may begin easing interest rates by the third quarter of the current financial year. Despite recent hikes, rates have peaked.

State Bank of India (SBI) Chairman Dinesh Kumar Khara has forecasted a decline in deposit rates over the medium term. According to Khara, the Reserve Bank of India (RBI) is likely to commence easing the interest rate cycle from the third quarter of the current financial year.

In recent developments, the RBI kept its key interest rates unchanged for the eighth consecutive time, maintaining a focus on inflation amid strong economic growth. Khara expressed optimism about the inflation trajectory moving towards 4 per cent by October, which could prompt an interest rate cut by the RBI.

With advanced economies like Switzerland, Sweden, Canada, and the Euro area starting their rate easing cycles in 2024, Khara believes the Indian banking sector's interest rates have already peaked and will follow a downward trend. Recent SBI rate hikes on short-term deposits confirm this outlook.