State Bank of India cut interest rates for cars a day after the Reserve Bank cut the Statutory Liquidity Ratio (SLR) by one per cent. The move, which is expected to benefit many of its customers, has been taken to combat the drop in demand for loans.
The rate, which has been reduced from 11.25 per cent to 10.75 per cent, will come into effect from August 7 and is expected to help the bank generate business in the current economic climate. However, the banking giant has left its base lending rate unchanged.
We feel that such a move will force its competition in the private and public sector to slash their rates and this is likely to affect their profits also. But with the festive season around the corner, the banks are likely to get more business.
