Rising lending rates owing to frequent policy rate hikes by Reserve Bank of India is compelling banks to review their credit offtake targets which they had set for this financial year.

With the recent policy rate hike by the apex bank in the second quarter monetary policy review, the largest lender of the country, State Bank of India has revised its credit offtake target and reduced it by 3% for this financial year.

SS Ranjan, chief financial officer, SBI said, "We have moderated our credit growth target to 18% from 21% projected for the current fiscal."

As per the earlier target set by the banking major, it had expected majority of its growth in credit disbursement to come from the retail space engulfing home loans and auto loans which are now going to see a pick following the policy rate hike.

According to SBI chairman, the retail loan book is growing at 20-21% on a year on year basis. He said the credit disbursal should take a pick this fiscal too in the festive season.

Other banks however have hope that they may be able to reach the projected target by the end of the fiscal.

MD Mallya, CMD, Bank of Baroda, said that the bank's outlook for the credit growth has remained unchanged at 24-25% for the current fiscal.

"We have already achieved the credit growth of 26-27% on year-on-year basis so far during the current fiscal. Though we are yet to take a view on our interest rate, I do agree that pressure does exist on this front.''