SBI to cut personal product rates

Mumbai: State Bank of India (SBI) has decided to cut interest rates on its personal banking products by 1 to 1.5 percentage point shortly. While this is line with the current interest rate scenario, bank officials also expect this to boost the banks business in this segment.

The average rate of interest in personal finance loans was around 14 to 16 per cent. In view of the falling interest rate scenario, the bank thinks it is necessary to rationalise the interest rate structure, a source said.

The source said over the past one year, credit pick-up in all segments have been poor the rationale behind dropping interest rates at this juncture was to capture a larger volume of the business.

SBIs personal banking portfolio covers housing, educational, auto and personal loans and loans against securities and gold. While the total portfolio size is in excess of Rs 15,000 crore, the housing finance segment itself accounts for more than half of it at Rs 7,047 crore.