The bank has reduced its benchmark prime lending rates by 50 basis points to 12.75, SBBJ informed the Bombay Stock Exchange on Tuesday.
The bank has slashed deposit rates by 50 basis points.
New interest rates will be applicable from the beginning of the next month, it added.
Interest rate on term deposits for a period of one to two years has been revised downward to 9 per cent from 10.25 per cent, while the rate on deposits for 3 to 5 years has been revised downward to 8.5 per cent from 9 per cent.
However, senior citizens for deposits of more than one year will get an interest which will be 0.5 per cent higher than the general rates, the bank informed.
The bank announced a reduction in its BPLR a day after the country's second largest bank, PNB, slashed the lending rates to 12 per cent with effect from January 1, 2009, in view softening money supply and on hopes of further cut by the apex bank in key rates and amount of deposits banks must park with the RBI (cash reserve ratio).
Besides, the parent of SBBJ, State Bank of India, had announced a cut of 75 basis points in its BPLR earlier this month.
Other public sector banks such as Bank of Baroda and Dena Bank had also reduced their BPLR by up to 75 basis points with effect from January 1, 2009.