Rajan's 'Scolding' Didn't Lead to Lending Rate Cut: SBI Chief

State Bank of India chairman Arundhati Bhattacharya says she was not "ordered" to cut interest rate by the Reserve Bank or Finance Ministry.

"It doesn't work like that. I think it is more of a media conjecture than reality. The Governor of the Reserve Bank as well as the ministry, they have very clearly given the independence to the banks to take a call. All of them realise that the banks need to remain profitable and healthy for the economy to be healthy and therefore there is no daant (scolding)," 59 -year-old Mr Bhattacharya told NDTV. (Watch)

Speculation that SBI was "ordered" to cut interest rate had gained ground after India's biggest lender announced a 15 basis point reduction in base rate on Tuesday, hours after Ms Bhattacharya said she will not take the responsibility for the non-transmission of RBI's back-to-back repo cuts.

"When you talk of transmission...when RBI hiked by 350 basis points, did banks raise EMIs by 350 basis points?" a visibly upset Ms Bhattacharya had replied to a question about why lenders are quick to raise rates, but slow to cut rates on Tuesday.

SBI as well as other big lenders such as ICICI Bank and HDFC Bank had refused to share a timeline about cutting interest rate on Tuesday afternoon despite a rebuke from RBI Governor Raghuram Rajan, who had earlier pulled up banks for not cutting lending rates despite RBI's 50-basis point repo cut in two months.

But despite their public posturing, banks, led by SBI, announced a reduction in repo rate the very same evening, surprising many in the market.