Three public sector lenders — Punjab National Bank (PNB), Bank of Baroda (BoB) and Dena Bank — on Monday announced a reduction in their benchmark prime lending rates by up to 75 basis points with effect from January 1. The country’s largest lender, ICICI Bank, said that it would also announce a cut in the interest rates on loans in early January.
PNB cut its PLR by 50 basis points to 12 per cent, the lowest benchmark for lending rates in the country, and BoB reduced its lending rates by 75 basis points from 13.25 per cent to 12.50 per cent. Dena Bank also said that it would cut its BPLR from 13.5 per cent to 12.75 per cent beginning next year.
ICICI Bank will reduce its rates also for its existing home loan customers, in a first such move since it started raising interest rates in 2005.
PNB also cut its peak rate of term deposits from 9.50 per cent to 8.50 per cent for deposits of 1 year to less than 3 years. This signals a reduction of 25-125 basis points in interest rates for term deposits having maturities of 46 days and above.
The bank had earlier reduced the BPLR from 14 per cent to 13.50 per cent on November 1 and further to 12.50 per cent on December 1 along with reduction in retail lending rates.
The country's largest lender, State Bank of India, had also announced to cut BPLR by 75 basis points to 12.25 per cent with effect from January 1.