SBI: Lending rate cut unlikely till end-Mar

Chairperson Arundhati Bhattacharya hints bank may consider it after passing FY16

State Bank of India, the country’s largest lender, isn’t likely to cut its key lending rate till at least end-March, chairman Arundhati Bhattacharya told reporters after opening a digital (‘sbiINTOUCH’) branch in south Mumbai.

She was responding to queries on further room for transmission of the Reserve Bank of India’s policy rate cuts. On Tuesday, HDFC Bank had reduced its base rate (BR) by five basis points, to 9.3 per cent.

On September 29, 2015, SBI had reduced its BR by 40 bps to 9.3 per cent, making it the lowest in the country. It has over months reduced the BR by about 70 bps till date. The BR is the benchmark rate to which all other lending rates are linked.

Referring to the new lending rate regime mandated by RBI from April (marginal cost-based loan pricing), Bhattacharya said there might not be much difference.

Bank has scaled down the target for opening more digital branches to 100, from the initial plan for 250. The business model for these had been changed, a senior executive explained.