Country's largest lender SBI on Tuesday said it will be cutting lending rates for car loans and consumer goods but ruled out any tinkering with its very aggressive home loan offering.
"Yes, we have received some communication from the government about what sort of retail lending we will look at for the next couple of months," managing director in-charge of national banking A Krishna Kumar said here.
He said the strategy involves slashing interest rates on already existing products and not adding new ones. Kumar, however, ruled out these loans adding to the already high NPAs which stood at 5.6 per cent in the June quarter, saying such loans have the lowest incidence of stress.
"These products which you are talking about are those products which have very healthy with very low NPAs. So in any case it makes sense for us to leverage that part of the book which is performing better," Kumar said.
Ruing out any lowering of interest rates on the home loan front, he said "home loans are practically lowest priced, and so there is no scope for reduction there, but we are looking at other products like car loans (where rates will be cut)," he said.
The bank's new chairperson Arundhati Bhattacharya said the idea is that the government will provide additional capital to the state-run banks and will expect the cost of capital being passed to the retail borrowers for purchase of consumer durables at cheaper rates.
"I think what they are looking at is ensuring that people, specially during the festive season, are able to access loans for purchase of consumer goods and consumer durables to the extent that it is feasible," she said.