The annual monetary policy for this fiscal is to be announced today. With regulator, Reserve Bank of India hinting towards another interest rate hike, SBI Chairman, Pratip Chaudhuri said that any further hike in interest rates may prove to be deterrent in growth of the industry as a whole.

"...inflation is something like 8 per cent plus and an increase in very high rate can have a danger of derailing the growth prospects," Chaudhuri said.

Analysts have forecasted a 25 bps rise in policy rates coming with the monetary policy.

Speaking about savings account deregulation, he said, "We are not in favour of deregulation but adequate incentives for saving bank deposits. We will go along with whatever the Reserve Bank of India prescribes," he said.

Commenting on proposed merger of associate banks of State Bank of India, he said, "We are still in the process of absorbing State Bank of Indore... We are not under pressure or in any urgency that the merger should happen tomorrow or day after.

The need to merge is well established as it will bring in the synergies and deduplication".