Within hours of RBI cutting the cash reserve ratio by 0.25 per cent, State Bank of India (SBI) said it will decide on reducing lending rates in a day or two for the benefits of borrowers.

“Our Asset Liability Committee (ALCO) will meet tomorrow or day after tomorrow to review interest rates…Transmission of monetary policy to surely take place,” SBI Chairman Pratip Chaudhuri told reporters in New Delhi.

Asked about the second quarter expectation, Chaudhuri said “September quarter end result should be good. So far in August our net interest margins are on target.”

In terms of loan losses and asset books, it looks a lot can happen between now and September, he said, adding “worst is over for asset quality.”

For the first quarter ended June 2012, SBI reported a 137 per cent jump in net profit at Rs 3,752 crore compared to Rs 1,583 crore in the same quarter of the previous fiscal.

The bank’s net non-performing assets (NPAs) rose to 2.22 per cent of total loan book at the end of June, against 1.61 per cent a year ago.