State Bank of India said on Monday it is considering further reduction in lending rates.
"There is thinking (on these lines)," SBI chairman O P Bhatt said when asked if there is a possibility of reducing the benchmark prime lending rate by the bank.
On the extent of cut in lending rates, the SBI chief said 'it is difficult to say at this point of time' but indicated that it would not be less than 25 basis points.
SBI earlier reduced the benchmark PLR by 75 basis points to 12.25 per cent with effect from January 1. Bhatt is in the capital to attend a meeting of state-owned bankers called by external affairs minister Pranab Mukherjee, who is also holding the finance portfolio.
On the interest rate outlook, Bhatt said, "There is a downward bias" in the short run and added liquidity at this point was not a matter of concern.
"Liquidity at this point of time is comfortable ... (there is) no concern". Commenting on the possibility of increase in non-performing assets of the bank, he said NPAs may go up both in proportion and absolute terms, with some small and medium enterprises and a few large corporates contributing to such assets.
"Maybe large and medium corporates could add to NPAs ... we need to be vigilant about it ... we can deal with it", Bhatt said.
"Personal loan (rates) will be down by 100 basis points from tomorrow," Corporation Bank chairman and managing director J M Garg said.
"The reduction in retail portfolio would stimulate some demand," Garg said, adding, the bank has also reduced the deposit rates across various maturities effective Sunday.
The peak deposit rates have come down by 50 basis points to 8.5 per cent, he said. Taking a cue from its peers, Kolkata-based Uco Bank also reduced its PLR by 75 basis points effective February 1.
"We have reduced our BPLR from 13.75 per cent to 13 per cent," UCO Bank chairman and managing director S K Goel said. The bank would further consider cutting the benchmark lending rate about 50 basis points in the next fortnight, he said, adding, "with inflation coming down, there is scope for cut in lending rates by 200 basis points.
"Our bank will cut rates in 2-3 tranches by March 31," he said. Deposit rates have also come down in consonance with the lending rate," he added.