Mumbai: Country's largest lender SBI on Saturday said it will reduce lending rate if the Reserve Bank reduces cash reserve ratio in the credit policy later this month.
"We expect a CRR (Cash Reserve Ratio) cut of 75 basis points. If it happens we will definitely pass the benefit to the consumers," State Bank of India (SBI) Chairman Pratip Chaudhuri said on the sidelines of 6th International Banking and Finance Conference in Mumbai.
There is a widespread speculation that the Reserve Bank of India (RBI) may go in for a CRR cut when it unveils its annual monetary policy on April 17.
CRR is the portion of deposit that banks are required to keep in cash with the RBI. At present it is 4.75 per cent.
Chaudhuri, however, added that the bank may not cut the base rate the minimum lending rate.
"Base rate is linked to the cost. That is average cost of deposit plus cost of intermediation. So, change in base rate is a little difficult. However, we will reduce the margin in some of the segments," he said.
The bank will close the fiscal with the net interest margin (NIM) of about 3.85 per cent, he said.
"There will be no impact on margin. In the last fiscal, we had given a guidance of maintaining 3.85 per cent on NIM, which we will stick to," he added.
On bad assets, he said, "We have declared a war on NPAs (non-performing assets) and we seem to winning that."