The largest lender of the country, State Bank of India has set its base rate at 7.5%.

This is not going to be a major concern for investors and corporates as only 3% of the total corporate lending of the bank is below 7.5%. So there will not be much re shuffling of the lending portfolio even after implementation of base rate.

The relatively low positioning of SBI’s base rate can be accounted to its higher current and savings account (CASA) deposits.

The bank’s share of CASA deposits at 47% is second only to HDFC Bank.

There are only a few banks in the country which can count for their CASA deposits at around 30%.

Two other large state-owned banks, Bank of Baroda and Punjab National Bank, have positioned their base rate at 8%.

While the share of CASA deposits was 36% for BoB Punjab National Bank was in a better position at 41% in FY 10.