Other banks are likely to follow SBI in cutting lending rates after the country’s largest bank on Wednesday cut home and car loan rates.
Bank lending to corporates has slackened due to a slowdown in the economy and now banks may be now stepping up the ante to attract retail customers.
State Bank of India on Wednesday cut lending rates on car and home loans by up to 50 bps, after the Reserve Bank of India on Tuesday reduced Statutory Liquidity Ratio (SLR) by 100 bps on Tuesday.
SBI’s new rates will be effective from August 7. The bank however did not change its base rate, keeping it at 10 per cent. Base rate is the benchmark rate below which a bank cannot lend.
SBI has lowered the rates on home loans of up to Rs 30 lakh to 10.25 per cent from existing 10.50 per cent. On home loans beyond Rs 30 lakh but less than Rs 75 lakh, the new rate will be 10.40 per cent, down from 10.75 per cent.
SBI’s will charge 10.75 per cent for a seven-year car loan, against earlier rate of 11.25 per cent.