SBI concerned about excess liquidity with the bank

Behrampur (WB), January 31: State Bank of India chairman O P Bhatt today said that excess liquidity available with the bank would be a matter of concern for the next two quarters.

“Going forward excess liquidity will be a matter of concern for the next two quarters and this would put pressure on the margins. However, that pressure is declining,” Bhatt told a press conference.

Excess liquidity is a problem because if banks receive more in deposits than they are giving out as credit, their earnings (that they would have earned from loans) come under pressure, affecting overall margins.

Bhatt said the CRR hike-money banks need to park with the RBI-was on expected lines and even after sucking out Rs 36,000, would leave twice as much liquidity in the system.

However, he was hopeful credit offtake would pick up in the near-term as the economy improves.