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Sep 07, 2012, 03.20 PM IST
Shares in State Bank of India, India's biggest lender, rose 1.8% after the bank slashed its deposit rates between 50-100 basis points across maturities, effective Friday.
Morgan Stanley, however, says SBI's move is more of a manifestation of a slowing economy with RBI data also showing loan growth for the system for April to August has been close to zero - similar to the 2008 levels. Morgan Stanley further warns that reduced growth in segments facing slowdown will accelerate restructured loans creation. But bond market dealers say SBI rate cut is a game changer and put RBI way behind the curve. Most economists polled expect RBI to hold rates when it meets on September 17 for monetary policy.
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