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SBI to cut lending rates from Nov 1

India's largest commercial bank, the State Bank of India said it will lower the prime lending rate, or the rate it charges its blue-chip borrowers, by 25 basis points to 10.75 per cent from November 1.

The bank, which has almost a fifth of the banking business in India, has also decided to lower the rate offered on its short-term advances by a similar margin to 10.25 per cent.

Although the bank did not give any reasons for the reduction, analysts said the cuts were in line with the overall downtrend in rates and helped by a raft of easing measures announced by the central bank on Tuesday.

The Reserve Bank of India cut the bank rate, its key signal, by 25 basis points to a 29-year low of 6.25 per cent along with the short-term repo rate, which was lowered by a quarter percentage point to 5.5 per cent.

The SBI also lowered the rate on medium term advances, or loans with a term of more than three years, by 25 basis points to 11.25 per cent.

"In addition, the bank has also reduced the maximum spread on advances to 2.5 per cent from 3.5 per cent over the prime lending rate," the bank said in a statement.

Earlier in the week, the bank lowered rates on deposits by up to 50 basis points.

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