SBI cuts benchmark lending rate by 0.4 per cent to 9.3 per cent

State Bank of India (SBI) on Tuesday cut its benchmark lending rate by 0.4 per cent to 9.3 per cent.

SBI chairman Arundhati Bhattacharya told a television channel that the bank will reduce its base lending rate by 40 basis points to 9.3 per cent.

She said the bank will also reduce its deposit rates by 25 basis points to 9.75 per cent.

The largest public sector lender is the latest one to follow the suit after Raghuram Rajan surprised everyone by slashing repo rate by 50 basis points. Before this, Andhra Bank announced 0.25 per cent cut in its lending rates, with effect from today.

The Reserve Bank of India (RBI) in its fourth bi-monthly monetary policy review today cut its policy interest rate to a 4-1/2 year low of 6.75 per cent. The bigger-than-expected move with inflation running at record lows, is expected to boost the economic growth.

In the policy review, RBI Governor Raghuram Rajan said, "the focus would now be to work with the government to ensure that banks pass on rate cuts further".

Finance Minister Arun Jaitley welcomed RBI's move and said, "the government would like to see commercial banks reciprocating with own interest rate cuts."

The reduction comes on the back of interest rates being cut thrice earlier this year by 25 basis points each.

(With inputs from Agencies)