"The 75-bp (0.75 per cent) increase in provisioning has closed the room for any lending rate cuts.
"Therefore, our asset liability committee, which met on Wednesday, decided to leave the lending rates unchanged," an SBI official told PTI.
The only measure which may have prompted a look at the rate cut was the 0.25 per cent reduction in the cash reserve ratio by the Reserve Bank of India (RBI) in its second quarter policy announcement on Tuesday.
After the credit policy announcement, bank chairman Pratip Chaudhuri had hinted at a rate cut saying the Alco will be meeting in a day or two and the bank will prefer a "secular cut" in the base rate.
RBI, as part of its gradual move towards higher provisioning for standard restructured assets, as mooted by the B Mahapatra committee, has increased the same to 2.75 per cent from two per cent.
The committee has proposed it to be raised to five per cent.
BASE RATE OF BANKS (in %) | |
Bank | Base rate |
SBI | 9.75 |
ICICI Bank | 9.75 |
HDFC Bank | 9.80 |
PNB | 10.50 |
BoB | 10.50 |
Canara Bank | 10.50 |
BoI | 10.50 |
Union Bank | 10.50 |
Source: Banks |
RBI stance: What biz leaders say
No immediate cut in lending rates: Bankers
Bank, realty stocks fall after RBI leaves rates on hold
'Liquidity may remain tight despite CRR cut'
Why yuan cannot replace dollar for int'l trade