The decision to hike rate will be ultimately good for the banking sector as the risk is getting re-priced properly, SBI’s Economic Research Department said in a report.
“The situation is different than during the global financial crisis wherein the lending started increasing aggressively (FY05 onwards) much before the rate hike cycle began (Mar’2010 till Oct’2011).
Currently, the rate hike cycle has begun and now the bank lending will increase factoring in the risk," said Dr Soumya Kanti Ghosh.
The report titled ‘Expect repo hikes in June and August too: 75 bps rate hike in FY23 looks imminent’ has been authored by Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.