SBI cuts SME lending rates by 50-350 bps

State Bank of India, the country's largest lender, today announced an across-the-board reduction in lending rates varying from 50 to 350 basis points for most non-retail borrowers.

The reduction in lending rates, targeted at businesses in the small and medium sector, will be effective from 1 June, SBI said at a press conference today.

SBI managing director and group executive (national banking) A Krishna KumarAnnouncing this, SBI managing director and group executive (national banking) A Krishna Kumar said the lower rates would benefit borrowers in the corporate, small and medium enterprise and agriculture segments.

The revision in rates will not apply for retail loans. SBI has also kept the base lending rate unchanged at 10 per cent.

The rate cuts could reduce SBI's net interest margin by 10 to 15 basis points, but Kumar said the bank would be able to maintain its guidance of 3.75 per cent margin for the current fiscal.

On Friday, last week, SBI had announced a 0.25 percentage point reduction in interest rates on short-term retail deposits.