SBI may cut prime lending rates

Close on the heels of a cut in the interest rate on long term domestic deposits, State Bank of India is now contemplating a downward revision in its prime lending rates.

"The soft interest rate stance continues. We have reduced deposit rates by 25 points and a revision (cut) in short and long end PLR rate cannot be ruled out", SBI managing director P N Venkatachalam told reporters in Mumbai on Friday.

The current PLR for short and long tenure credit were among the lowest in the industry, Venkatachalam said but declined to provide any further details on cut in PLR.

SBI's short and long term PLR are pegged at 10.75 per cent and 11.25 per cent respectively.

"We expect a change in the yield pattern on government securities where difference in short and long duration gilts was just 60-65 basis points", he said adding such a situation was unsustainable and yields on 10-year paper are expected to stablise around 6 per cent.

On the drive to attach and recover assets from defaulters under the Securitisation Act, he said SBI has already attached assets in 12 cases through out the country, including a paper mill and a hotel in Maharashtra circle.

The board of the asset recovery company, where SBI is one of the major shareholders, would shortly formulate a policy on valuation, recovery and sale of of assets as well as management of assets under banks' charge, he said.