High credit-deposit ratio restricts banks' ability to cut interest rates

SBI reduces rates by 5 basis points on home loans up to Rs 30 lakh

In a sign that borrowers might have to wait longer to enjoy the full benefit of 25 basis points cut by the Reserve Bank of India (RBI), country’s largest lender State Bank of India (SBI) on Friday evening cut interest rates on home loans up to Rs 30 lakh by only five basis points. 

Analysts say a sharper rate cut is not possible thanks to a slower growth of deposits. 

“SBI has the highest market share of the home loans market and it is only appropriate that we empower the large lower and middle class segment by transmitting the rate