A month after the bank rate cut by Reserve Bank of India and the reduction in lending rates by banks, State Bank of India hinted at the possibility of further reduction in interest rates.
"Interest rates will continue to be stable with a little downward bias," SBI chairman A K Purwar said replying to a query at an international banking summit in New Delhi on Wednesday.
The statement assumes importance in the wake of reduction in lending and deposit rates by most of the banks after the benchmark bank rate was reduced by 0.25 per cent to 6.25 per cent in the October busy season credit policy.
SBI had brought down prime lending rate by 0.25 per cent to 10.75 per cent, medium term lending rate to 11.25 per cent and short-term rate to 10.25
The bank also reduced its term deposit rates by 0.75 per cent to 7.0 per cent for 1-2 years deposits, 7.25 per cent for 2-3 years and 7.5 per cent for over three years. Housing loan rates have been reduced to about 9.5 per cent.
RBI in April credit policy indicated a 0.50 per cent reduction in bank rate but had slashed rate by only 0.25 per cent thus leaving room for a further reduction in the coming months if required.