The Bank had already reduced lending rates across certain segments. SBI's cut in deposit rates comes close on the heels of cuts affected by various banks including, PNB, IDBI Bank, Syndicate Bank, Bank of Maharashtra etc.

It may be recalled that the RBI had reduced repo rates on April 17, 2012, by 50 basis points, a move that triggered lowering of interest rates by banks for deposit and lending rates. Repo rates are rates at which the RBI lends money to banks. Any reduction in repo rates generally tends to bring down interest rates in the economy.

Other banks that have not announced a cut in deposit and lending rates, by be prompted to do so, following State Bank.

The shares of State Bank were down 2.14% at Rs 2212.

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