The largest lender, State Bank of India (SBI) may cut the interest rates further in the new fiscal. The bank is likely to take the move because of the lower-than-expected credit growth during the year.

SBI's Chairman O P Bhatt said, "There is a possibility of a downward revision in lending as well as deposit rates in the financial year ... But the (extent) of the cut and time have to be decided."

He further said that the asset-liability committee of SBI will take a decision in this regard whenever it is required.

The Chairman said that the credit growth during this quarter has been low than the expected level. "We don't know whether this is because of lack of demand or high interest rates," he added.

The interest pressure during the period was also high despite of the enough liquidity. "There is pressure on net interest margin. Because of various schemes we have introduced in the last two to three years, there has been an increase in the money flow into SBI, which is evident from our rising market share," said Bhatt.

Further he said the credit growth in the new financial year would depend on a number of reasons including the global economic conditions, the timely beginning of monsoon and the new government and its policy stance.

For the quarter ending on December 2008, SBI recorded an increase in loan disbursement by two-and-a-half times in comparison to the corresponding period, a year ago.

SBI is a preferred bank for a large population ranging from the agriculture sector, small and big industries to self-help groups. Housing and personal loans by the bank are also amongst the products for which the demand is high. "We are opening SBI branches everywhere to ensure services to people from all sections," said Mr Bhatt.