State Bank of India has said on Monday that though there is a little room for further reduction in the base rate, the bank could cut lending rates in select categories, as it recently did for the SMEs, home and auto loans.
State Bank of India (SBI) has said on Monday that though there is a little room for further reduction in the base rate, the bank could cut lending rates in select categories, as it recently did for the SMEs, home and auto loans.
Pratip Chaudhuri, Chairman, SBI, while talking to reporters said, “Given that the bank has already reduced the base rate, another round of rate cut may be difficult but the bank may go for reducing rates, and thereby, cutting spreads in select loan categories.”
He added that with the reduction in base rate, the bank was leading the path of interest rate reduction in the system, in sync with the wishes of the central bank.
The bank had slashed its base rate by 0.25 per cent to 9.75 per cent last Tuesday in a bid to transmit the benefit of the 0.25 per cent reduction in the cash reserve ratio by the Reserve Bank of India (RBI).
Despite muted credit growth, the bank is hopeful of meeting its credit growth target of 18-20 per cent on the back of recent reduction in the base rate, according to Chaudhuri.
According to Chaudhuri, credit growth is up 14.5 per cent as of now, while deposits are clipping at 16 per cent. The bank also aims at 20-25 per cent growth in auto and home loan in the current fiscal on the back of recent rate reduction in these segments.
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