According to State Bank of India Chairman Mr. Pratip Chaudhuri, softening of lending rates will be helpful for kick-starting the investment cycle in the country.

Though the country has shown rapid growth, mainly in the manufacturing sector, the key interest rates were much lower.

Mr. Pratip Chaudhuri said, "Rates of interest need to come down further. Our base rate is at 9.70 per cent, I would like to see a base rate of something like 9.50 per cent because internationally the rates are so low".

SBI chief said that the lending rates in the banking system could soften if the RBI reduces key policy rates in its mid-quarter review of monetary policy, which is due on March 19, 2013.

"Both the CRR and the repo rate should be cut by 50 basis points each. CRR cut is more important as it releases primary liquidity into the banking system. Whereas a repo rate cut is more of a signal/an indication (of the direction of interest rates). It is not very material but, yes, the cost of refinance goes down," said Mr. Pratip Chaudhuri.