Expecting the Reserve Bank of India to maintain stable and soft interest rates in credit policy, State Bank of India on Wednesday hinted at further cut in home and consumer loan rates.

"I am a strong advocate of stability in interest rates with a soft bias. With global trends, the soft interest bias will continue in India as well," SBI chairman Arun Kumar Purwar said after inaugurating a new industrial finance branch in New Delhi.

Asked whether he expected a cut in bank rate, repo rate and cash reserve ratio in the forthcoming busy season credit policy, he said, "It is for the RBI to decide. Let us wait till November 3."

Market expects RBI to slash bank rate by 0.5-1.0 per cent and repo rate by 0.5 per cent on account of excess liquidity and decline in yields on 10-year government papers to less than 5.0 per cent.

RBI had slashed bank rate by 0.25 per cent to 6.0 per cent in the April slack season credit policy and repo rate by 0.50 per cent to 4.5 per cent a month ago.
    
The CMD of the country's biggest commercial bank said further cut in interest rates on home loans and consumer loans can't be ruled out in the medium term.

On retail loans, Purwar said, "SBI has always stressed on the retail segment. Retail loans are secure and recovery is high. Where NPAs are lower at 2.0 per cent, interest on such segments should come down."

The SBI chief dismissed any move to match the home loan rates with that of ABN Amro Bank, which forayed into this segment offering 6.0 per cent rate in the first year, 6.5 per cent in the second year and prevailing floating rate from the third year.

"It is a ridiculous way of giving incentives. SBI does not believe in such gimmicks. We have a nationwide presence and with soft interest bias continuing, further rate cuts can't be ruled out," Purwar said.

SBI slashed home loan rates last month and it is unlikely to reduce them again in the short run, he added.

SBI's home loan portfolio has been growing by 46 per cent in the last six months and it was at about Rs 1,500 crore (Rs 15 billion) last fiscal.

Referring to the competition in banking sector, Purwar said the situation warrants survival of the fittest and hence interest rates have come down significantly in the last few years.