SBI slashes lending rates for SMEs to 8-10 per cent

11 April 2009

State Bank of India, which on Friday cut its deposit rates by 25-50 basis points, today reduced its lending rates applicable on new loans to small and medium enterprises (SMEs) to eight-ten per cent.

SBI, the country's largest lender, also announced a few other measures to improve credit flow to the small and medium industries.

For loans up to Rs5 lakh, SBI has slashed lending rates for new SMEs to eight per cent and for loans Rs5-25 lakh the bank will charge 10 per cent, an SBI release said.

The reduced rates will be available for the next two years and will be applicable for working capital and term loans provided they are covered under CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises), the bank said.

At the end of two years, ie, by April 2011-12, the bank will review the rates according to the prevailing market conditions, SBI said.

SBI has also extended the SME Help and SME Care schemes, under which it offers loans at eight per cent to SMEs from April to 30 September 2009.