In a new year gift, the State Bank of India has decided to reduce the interest rates for priority sector lending by 50 basis points across the board with effect from Wednesday.
The cut of 0.5 per cent would be on agricultural, small scale industry and small business finance in order to give a fillip to these important sectors of the economy, SBI said in a release in Mumbai on Tuesday.
A senior SBI official said that current competition compelled the bank to provide loans at sub-prime lending rate to the corporate sector and "we wanted to make the interest rates more equitable for priority sector, and hence the reduction."
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