However, the ability to pass on the hikes to borrowers is going down, he said at the launch of the bank's Vishwa Yatra Foreign Travel Card in Saudi Rial.

To contain inflationary pressures, the RBI has hiked the short-term rate (or the repo rate) at which it lends funds to banks 12 times in the last 18 months. The repo rate has moved up from 4.75 % in March 2010 to 8.25 %. One % change is equal to 100 basis points.
With food inflation surging to 10.6 % in the week ended October 8 (9.32 % in the previous week) and the wholesale price index-based inflation remaining elevated at 9.72 % in September (9.78 % in August), economists expect the RBI to up the repo rate by 25 basis points in the second quarter review of the monetary policy on October 25.
Banks have transmitted the repo rate hikes to their borrowers by increasing their benchmark base rates by almost 400 basis points. To arrive at the lending rate for borrowers, banks add credit risk premium and tenure premium to the base rate.
Bank credit has grown a tad slower in the current financial year so far. Since the beginning of the financial year and up to October 7, banks saw a credit growth of Rs 2,06,515 Cr (Rs 2,28,271 Cr in the corresponding period last year).
MTM

SBI plans to take a call next month on raising $500 million under the medium term note programme, according to Mr Hemant Contractor, Managing Director.
India's biggest bank had doubled the size of its MTN programme to $10 billion on September 22.
The bank's ability to raise resources from overseas markets under MTN is unlikely to be undermined by credit rating agency Moody's Investors Service downgrade of its financial strength rating to ‘D+' from ‘C-‘, according to a senior official of a domestic credit rating agency.
“Moody's has not changed the foreign currency rating on SBI's long-term/short-term senior debt. So, the bank will be able to mop up resources under MTN at competitive rates,” said the official.
POS Terminals
SBI plans to have a network of 25,000 point-of-sale (POS) terminals by the end of December 2011 through a joint venture with Visa International and Elavon. Currently, the bank has a network of 10,000 POS terminals (electronic machines on which credit and debit cards are swiped to make payments). Overall, the venture plans to set up 6 lakh POS terminals in five years.
“We are finalising the POS venture. Currently, we have 26 Cr retail customers. We are opening almost 60,000 savings bank accounts per day.
“So, the POS infrastructure and ATM expansion plans are aimed at enabling retail payments,” said Mr R Karthikeyan, Chief General Manager, SBI.
The State Bank Group plans to add 10,000 ATMs by March-end 2012.
Yatra Card
SBI on Friday introduced the Vishwa Yatra Card in Saudi Rial. The bank already has this pre-paid stored value foreign currency travel card, which has a validity of five years, in six currencies — US Dollar, Pound Sterling, Euro, Australian Dollar, Canadian Dollar and Yen.
The SBI card can be loaded/ re-loaded at over 350 branches of SBI, which deal in foreign exchange.
With this card, parents can meet the expenses of their children studying overseas; pilgrims need not carry cash on their pilgrimages or for that matter chase money changers; and employers sending employees overseas can load the card with allowances.