State Bank of India (SBI) on Tuesday said it will 'do a comprehensive cut' in lending rates on various loans following the Reserve Bank's 0.5 per cent reduction in the repo rate.
"Of course, there would be a transmission. The transmission of the last CRR (cash reserve ratio) cut has also not happened fully because that came in March. We thought we would wait till (April) 17th and do a comprehensive cut," SBI Chairman Pratip Chaudhuri said after RBI unveiled its annual credit policy."
"It (a lending rate cut) will not be across the board, it will be particularly for segments where the mark up above the base rate is significantly high," he said.
Asked if there will be substantial reduction in interest rates, he said, "Yes it will be."
Base rate, the minimum lending rate below which a bank cannot lend, of SBI stands at 10 per cent. SBI's base rate is the lowest in the industry.
Last month, RBI slashed CRR (cash reserve ratio) - the percentage of deposits that banks have to keep with the RBI - from 5.5 per cent to 4.75 per cent.
With this, the central bank had infused Rs 48,000 crore into the economy. "So largely it would be in our case for the SME but it is for our ALCO (asset liability committee) which is meeting on Tuesday evening to take a call," he said.
"But we have to look at some other parameters to take final call on passing on the rate cut to borrowers. But it will happen very soon," he added.