State Bank of India (SBI) today announced cut in lending rates between 0.5-3.5 percent, mainly for the small and medium enterprises (SME) and the agriculture sector. This is days ahead of the RBI reviewing the interest rate.

However, interest rate on home and retail loans will remain unchanged, the banking leader said, adding they are low and competitive.

Announcing the reduction in interest rate, SBI Managing Director and Group Executive (National Banking) A Krishna Kumar said the base rate will also remain unchanged at 10 percent.

The Reserve Bank of India is scheduled to come out with its mid-quarter review of the credit policy on Monday amidst expectations of a cut in the short-term lending rates. Though near 8 percent inflation leaves small room for the big reduction in interest rate, the industrial growth slowing to mere 0.1 percent in April is exerting pressure on the banking sector to go in for easing of the monetary policy.