New Delhi: State Bank of India (SBI), the country’s biggest lender is thinking over dropping lending rates for some of its loan products in its next asset-liability group conference.

O.P. Bhatt, chairman and managing director of SBI, said, “The next asset-liability committee (ALCO) meeting might consider the current situation and take a call on interest rates.”

Mr. Bhatt was in New Delhi to attend conference called by Finance Minister to talk about how to swell the credit flow to automobile and paper industries.

Bhatt pointed that the bank may thinking about lowering lending rates for certain sections or launch some festival season schemes. The ALCO of the bank assembles once in a week.

Bhatt said the bank may take a call on interest rates even before the central bank evaluates monetary plan on October 30.

The banking institution is also making discussions with finance ministry on its plan to lift Rs 10,000 crore by trading fresh new equity during November-January.

Despite retardation in loan development, SBI was searching different alternatives comprising a public offer, a rights issue, and a preferential share sale, Bhatt said.

Bhatt also said, “We would like to raise Rs 10,000 crore. On current valuation, the government stake will be diluted by 2.5 to 3.0 per cent after the proposed share sale.”

The bank was not planning a stock split before the planned issue.

Now the administration holds 59.73 per cent in the bank. Bhatt said the bank required Rs 4,800 crore to meet up the Basel II standards on capital adequacy by March next year (2008). He was confident of SBI meeting its aim of 24-25% annual increase in loans in 2007-08.