New Delhi, Nov 6 (UNI) Housing and consumer loans will now be cheaper, with the State Bank of India(SBI) and a slew of other Public and Private Sector Banks today announcing a cut in deposit and lending rates by as much as 75bps, heralding an era of soft interest rate regime.
SBI, the biggest Bank of the country, reduced lending rates by 75 bps and deposit rates by 50 bps across maturities from 91 days upto five years. The rate cuts are effective from Monday.
The PLR will be 75 bps lower than before.
Other Banks took a cue from this, announcing rate cuts more or less in the same vein.
Among the private Banks, Citi Bank led the way cutting PLR by 50 bps. Other private Banks said they are contemplating similar moves.
For instance, HDFC said it will make a review next week.
The rate cuts came after the RBI's in a series of steps infused huge liquidity into the financial system, slashing CRR by 350 bps, cutting repo rate by 150 bps and reducing SLR by one per cent.
The Finance Minister in his recent meeting with Chief Executives of PSBs had asked them to price credit appropriately, thus hinting that they cut lending rates to improve credit delivery.
Allahabad Bank and State Bank of Mysore this afternoon reduced their Prime Lending Rate (PLR) by 75 basis points also with effect from November 10.
After the reduction, SBI's PLR will stand at 13 per cent from the current 13.75 per cent, while PLR of the Allahabad Bank will be at 13.25 per cent compared to 14 per cent at present.
Allahabad Bank will reduce interest on term deposit by 50 basis points from December 1.
Central Bank of India reduced its Benchmark Prime Lending Rate (BPLR) by 75 basis points from 14 per cent to 13.25 per cent from November 10, while Oriental Bank of Commerce (OBC) and Indian Overseas Bank (IOB) decreased their PLRs by 75 basis points to 13.25 per cent each with immediate effect.
Dena Bank announced a reduction of 75 bps in its BPLR from 14.25 per cent to 13.50 per cent, to be effective from November 10.
To the delight of the reality sector which of late has started becoming sluggish, Oriental Bank of Commerce has reduced its interest rates on housing loans up to Rs 30 lakh.
It has also reduced interest on education loans.
OBC being the first Bank to do this, it set in motion a process of lower interest on housing and education loans. OBC, a mid-sized Bank, often has been a trendsetter of sorts.
Corporation Bank announced cut in its Prime Lending Rate by 75 basis points to 13.25 per cent from 14 per cent, to be effective from November 10.
Three PSBs -- Canara Bank, Bank of India and Bank of Baroda -- slashed their PLRs by 0.75 per cent yesterday.
Other lenders, who have reduced their interest rates include Punjab National Bank and Union Bank of India--both very large Banks.
The good news of a lower interest rate regime comes after the festive season. Had it been otherwise, there would have been more glitter and sweets on Diwali.
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