State Bank of India is trading higher by 1.6% at Rs 2,247 in an otherwise subdued market after the bank decided to cut the lending rates by 25 basis points.
The country's largest lender, State Bank of India (SBI), on Saturday reduced its benchmark prime lending rate (BPLR) by a similar margin. The public sector bank’s BPLR now stands at 14.5 per cent.
Last Monday, the Reserve Bank of India, while keeping the key interest rates unchanged, had cut the cash reserve ratio (CRR) by 25 basis points to 4.5 per cent of the banks’ net time and demand liabilities (NTDL). The banks don’t earn any interest on CRR. This move will be releasing Rs 17,000 crore in the banking system enabling the banks to lend it to the productive sectors. SBI as the biggest lender would gain maximum Rs 2,500 crore from this additional liquidity.
The stock opened at Rs 2,215 and touched the high of Rs 2,252 in trades so far. A total of 1,52,000 shares have already changed hands compared to 5,70,000 shares that were traded daily in the past two weeks.
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