Mumbai: Country's largest public sector lender State Bank of India today fixed its benchmark lending rate at 7.5 percent following a Reserve Bank directive, a move that will end the practice of sub-prime loan to corporates. The rate will come into effect from July 1.
"State Bank of India has fixed the base rate at 7.50 per annum with effect from July 1, 2010," the bank said in a regulatory filing to the Bombay Stock Exchange. Private banks and other lenders are also likely to peg their base rate closer to that of SBI to stay competitive in the corporate loan market.
Sub-prime loan offers lower than market rate to companies with high credit worthiness. The Reserve Bank has set July 1 as the date from which the base rate regime (for lending) will come into effect.
Source: PTI
