Following the 0.25 percent cut in cash reserve ratio (CRR) by Reserve Bank of India, the country's largest public sector bank, State Bank of India has announced that it might slash lending rates on all or some retail loan products.

Talking on the matter, the Chairman of SBI, Mr. Pratip Chaudhuri said, "Our bank, it's for ALCO to take a view. But we would prefer a more secular rate cut with the adjustment in the base rate because we have almost (done) rebalancing of the portfolio... but it is for ALCO to take a final view. I think our ALCO (asset liability committee) would meet in a day or two."

Currently, the bank's base rate is at 9.75 percent. Last month in September, the bank had slashed it base rate by 0.25 percent.

Explaining the effect of reduction in interest rates on demand for consumer loans, Chaudhuri further added, "We have greatly benefited by rate cutting because now the growth is coming in the retail segment which is rate sensitive and ever since we have dropped our home loan rate our daily sanctions have almost tripled. Home loan sanctions used to be Rs 65 crore, now there are about Rs 150 crore per day."

It should be noted that early in October, SBI had cut processing fees on car loans and home loans by about 50 percent as part of the festive season offering.