SBI Chairman O P Bhatt told reporters in Mumbai on Thursday, Nov 6 that the bank's PLR will now stand reduced to 13 per cent from 13.75 per cent. Several public sector banks such as Punjab National Bank, Union Bank, UCO Bank and Syndicate Bank have already effected a cut in their PLRs. On Tuesday, Finance Minister P. Chidambaram met heads of public sector banks following which bankers had promised to cut their lending rates by up to 0.75 per cent.
The recent hardening of interest rate cycle is now getting reversed after the Reserve Bank of India (RBI) eased money supply to spur growth in the wake of global financial crisis, which has affected the Indian economy as well.
The Reserve Bank had slashed its reserve ratios and short-term lending (repo) rate to inject over Rs. 2,60,000 crore into the system.