Mumbai: Country's largest lender 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 percent 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 in which repo rate was by "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 percent. 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 percent to 4.75 percent. 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 today 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.

To bring down the cost of borrowings for banks, RBI on Tuesday slashed short-term lending (repo) rate by 0.5 percent to 8 percent. The reduction in the policy rate comes after a gap of three years.
   
In the Annual Monetary Policy, 2012-13, RBI doubled borrowings under the Marginal Standing Facility for banks to 2 percent of their deposits with immediate effect to ease liquidity. It also permitted banks to borrow under the MSF even if they have excess government securities holdings.

(Agencies)