State-owned Union Bank of India on Monday reduced its Benchmark Prime Lending Rate (BPLR) by 0.5 per cent to 13.5 per cent with immediate effect.
The rate cut will be applicable for all PLR-related loans including auto, home and corporate loans, a Union Bank official said.
"We have reduced our Prime Lending Rates from today. All loans linked to PLR will now carry lower rate," the offical told PTI in Mumbai.
The move has come shortly after the Reserve Bank slashed its key rates such as Cash Reserve Ratio (CRR), Statutory Liquidity Ratio and short-term repo rate with a view to stabilise the liquidity conditions in the banking system.
Country's second largest public sector lender Punjab National Bank had already reduced its PLR by 0.5 per cent last week while other leading lender IDBI Bank has also reduced its home and education loans rate following the latest round of RBI policy action.
Though India's largest lender State Bank of India (SBI) is yet to take a view on any possible reduction in their lending rates, the bank is expected to revise its rates downwards in the near future.
Other banks are also likely to take a call on their interest rates in the coming days.