The country's largest lender, SBI is gearing plans of reviewing its interest rates on retail loans once the monetary policy is announced on April 20, 2010. This information has been sourced from a regional head of the bank. The bank has kept its word of not hiking rates before the credit policy review.

"Liquidity is coming down, so we need to necessarily hike deposit rates. Automatically, interest on advances would go up," Ms Arundhati Bhattacharya, Chief General Manager, State Bank of India said.

She also said that the bank has shown a commendable growth in credit. "There is still a lot of pent-up demand. People had a lot of uncertainty in their mind during recession regarding buying a property because of their job insecurities," Ms Bhattacharya added.

The biggest hit has been in the residential segment with a ticket size of Rs. 60-75 lakhs.

She gave the credit for rise in retail loan growth to the fast turnaround time for loan processing in SBI. "Auto loans are processed in two days, and home loans in five days. We have put systems in order," said Ms Bhattacharya provided all documents are in place.

Lending to the SME segment has shown a decline. "There is not much of an off-take, because the build-up of inventory is less as orders had come down due to slowdown. Things are getting better now," she said.

She said credit lending to self help groups has also been good for the bank. She added that the bank has emphasis on rural sector. "And we intend to open customer touch-points such as banking correspondents (BCs) and banking facilitators (BFs), and kiosk banking," she said.

The bank is however not sure as to how many BCs will be added this year.