The largest lender in the country, the State Bank of India (SBI) has announced a reduction in its lending rates by between 0.5 percentage point and 3.5 percentage points for small and medium enterprises (SMEs) and the agriculture sector.

.Krishna Kumar, Managing Director and Group Executive for National Banking, SBI said that the bank has reduced the overall interest rates by 50 to 350 basis points. He also said that the bank's rate could remain at 10 per cent.

The reduction will not affect personal segment loans, including home and retail, loans sanctioned under specific schemes. Mr. Kumar said that the bank has already reduced the rate for the segments and individual borrowers during the past two months.

He said that the reduction was delayed because the bank had to upgrade the IT systems with the new rates. He also said that the bank might reduce deposit rates if the RBI lowers interest rates on Monday.

He said that the impact of reductions on the banks margins will not be more than 10-15 basis points and the bank will ensure that it is offset with the help of an increase in advances.