In an interview with ET NOW, SBI Chairman, Pratip Chaudhuri said, “We have targeted the retail segment because the instrument of interest rate should be used for increasing credit flow. Large term loan proposals are very few and working capital for good corporates is already happening below base rates... So, for a bank like us, the option is to accelerate the retail (lending)”.

“The interest spread on loans is determined by the demand and supply position at a given point of time and I should be given the flexibility to move according to the demand or according to the book I have. For example, today can you say that two months back I paid a higher price for an iPad or an iPhone so the price should be lowered for me. Today most of the loans can be closed without a pre-payment penalty. So, if you find that a new loan has come and your existing bank is not reducing interest rates you can shift from that bank and come here” he added.