SBI cut the retail-term deposit rates today.
PK Gupta, MD, State Bank of India said that in most of the buckets there is a rate cut by 25 basis points.
He said the an asset-liability committee (ALCO) had met last week and looked at all the interest rates and decided to cut some deposit rates. MCLR has also cut 5 bps this month.
When asked if this could mean cuts on the lending side, he said they will automatically get translated.
The 25 basis points cut will further translate in marginal cost-based lending rates (MCLR) advantage going forward, he said. The cut in MCLR is based on the composition of entire deposit fund base and so, the cut could be anywhere between 5-10 bps but the bank will take decision on that next month, he added.
He does not expect much impact on margins due to retail-term deposit rate cut. The lending rate currently stands at 7.95 percent.
Talking on the recapitalization and bank lending more to housing sector, he said government in their recapitalisation plan had made it clear that MSME will be one sector that should get funding and so the affordable housing sector will benefit from this naturally.
There has been no specific details on the recapitalization process from the government, said Gupta.
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