The State Bank of India, recently declared interest rate cuts on loans to Small and Medium Enterprises (SMEs) in the aftermath of Reserve Bank of India’s decision to cut repo rate by 50 basis points. After inaugurating a small and medium city credit centre for speedy processing of loans to SMEs, SBI managing director A. Krishna Kumar said that since around 47 per cent of deposits are under current accounts and savings accounts, net interest margins of the bank will not be affected. Banks like the ICICI Bank, Bank of Baroda, Punjab National Bank and Bank of Maharashtra, have already reduced their deposit and lending rates following RBI’s decision.
At the inauguration of the second SMECCC — a centralised credit processing centre for SME accounts Kumar opined that the SME sector in the country is under pressure due to economic factors but is slated to perform well in the current fiscal year.
