The interest you earn from FDs and savings bank deposits will come down. New home loans will be cheaper, but existing home loan rates will not change immediately. The bank wants people to borrow more, and spend more.
"Resolving stressed assets is the top priority of the (SBI) bank. Bad loans need to be resolved on an urgent basis as it will help in reviving the economy," said Rajnish Kumar, the chairman-designate of State Bank of India.
Not only such high disparity in compensation makes it difficult for the government to hire top managers laterally at public sector banks, as pointed out by Rajan, it also impacts the motivation of public sector managers who have to fiercely compete with their private sector peers.