SBI may bring down lending rates to boost demand for retail loans

State Bank of India (SBI) is reportedly considering options to boostdemand for retail loans, by reviewing lending rates in October 2007, when the festival season begins, says media reports quoting bank sources.

SBI and other banks are likely to opt for a rate hike if credit does not pick up by the end of August 2007.

The banks’ prime lending rates (PLRs) increased by 250-300 basis points during 2006-2007. The PLRs of most major banks have increased to 12.75-15.75 per cent at present from 10.25-12.75 per cent in 2006.