SBI may cut lending rates further: Bhatt

Within a month of cutting the benchmark lending rate by 75 basis points, the country's largest lender, State Bank of India (SBI), today said it may again do a repeat performance.

"There is thinking (on these lines)," SBI Chairman O P Bhatt said when asked if there is a possibility of reducing the benchmark prime lending rate (PLR) by the bank.

On the extent of cut in lending rates, the SBI chief said, "It is difficult to say at this point of time" but indicated that it would not be less than 25 basis points.

SBI last reduced the PLR by 75 basis points to 12.25 per cent with effect from January 1 in response to the slew of measures taken by the Reserve Bank of India.

 

In a bid to stimulate housing demand, the public sector behemoth cut its home loan rates to eight per cent regardless of the principal, on Saturday. The scheme will be valid till April 30, 2009.

On the interest rate outlook, Bhatt said, "There is a downward bias" in the short run and added liquidity at this point is not a matter of concern.

"Liquidity at this point of time is comfortable... (there is) no concern".

Commenting on the possibility of increase in non-performing assets of the bank, he said NPAs may go up both in proportion and absolute terms, with some small and medium enterprises and a few large corporates contributing to such assets.

"Maybe large and medium corporates could add to NPAs... We need to be vigilant about it... We can deal with it," Bhatt said.

Meanwhile, Corporation Bank Chairman and Managing Director J M Garg said the bank has decided to cut retail loan rates by as much as 100 basis points from tomorrow.