JOIN USClose on the heels of cutting auto loans and fixed deposit rates, State Bank of India (SBI) said it will reduce interest rates on SME (small and medium enterprises) loans by up to 2 percentage points soon.
“We have cut auto loans, car loans particularly. We are cutting rates for loans to SMEs very sharply, by 1.5-2 percentage points,” SBI Chairman Pratip Chaudhuri told reporters here.
At present, SBI’s lending rate for SME sector varies between 12.5 per cent and 17 per cent. Asked if there would be any impact on its margin due to downward revision, he said, “Overall, the impact on margins will be neutral.”
SBI had cut its car loan rate for new borrowers by 0.75 per cent to 11.25 per cent.
With the reduction, a customer has to pay Rs 1,725 EMI against Rs 1,765 per month earlier. SBI claimed this as the lowest EMI. A borrower thus would save Rs 480 per year on every one lakh.