State Bank of India is looking at introducing a separate prime lending rate for home loans even as it expects a 12-13 per cent growth in total loan portfolio as against a targetted 15-16 per cent rise before year ending March 2003.

"We are looking at a proposal to introduce a separate State Bank Home Lending Rate. However, the board is yet to approve it," SBI managing director P N Venkatachalam told newspersons in Mumbai on Wednesday after SBI signed a tie-up with Maruti Udyog Ltd for auto finance.

This rate would be below the prime lending rate of the bank and help the country's largest bank to pass on the benefit of any interest rate reduction to existing housing loan customers also, he said.

The housing loan portfolio has grown by Rs 3,000 crore (Rs 30 billion) upto December 2002 and would touch Rs 4,500 crore (Rs 45 billion) in this fiscal, he added.

SBI chairman A K Purwar said the retail loan segment has grown by 33 per cent while total loan portfolio has seen a rise of seven per cent.

Asked about hiking the ceiling for foreign institutional investors beyond the present 20 per cent in SBI, he said "the government has been examining this issue for some time and it is for them to decide."

On any plans for increasing deposit rates as was done by Bank of Baroda, Purwar said, "there is no immediate plan."

About the effect of a possible Iraq war on inflation, Purwar said, "It will have an impact with the rise in oil prices but it cannot be estimated as to how much it will be."

The interest rate scenario also looks steady. Globally the rates are much lower than in India and keeping this view in mind, the interest in the country would be softer in the long run, he added.

Referring to SBI's Resurgent India Bonds coming up for redemption in September 203, he said the bank has sufficient funds to repay the RIBs.