SBI associates allowed to fix lending rates

MUMBAI, Dec 13: The State Bank of India has given its seven associate banks the freedom to fix their lending rates with immediate effect. The directive, issued last week, was a part of the "autonomy" package that the parent bank has worked out at the instance of the finance ministry, industry sources said. Along with the freedom in fixing lending rates, SBI has also raised the cap on investments and clean advances given by the associates. "They will still need the statutory approval of the parent bank under the SBI (Subsidiary Bank) Act. However, the limits on investments and loans have been substantially raised," a senior State Bank executive said.

With this, the 7 SBI associates – State Bank of Hydrabad, State Bank of Patiala, State Bank of Travancore, State Bank of Bikaner and State Bank of Jaipur, State Bank of Mysore, State Bank of Saurashtra and State Bank of Indore now have the freedom to function as independent identities.