Date:21/02/2008 URL: http://www.thehindu.com/2008/02/21/stories/2008022155811900.htm

Business

SBI, BoI cut lending rates again

Special Correspondent

Union Bank revises BPLR downwards by 50 basis points

MUMBAI: Prior to the Union budget next week, public sector banks, State Bank of India (SBI) and Bank of India, on Wednesday cut their lending rates for the second time this month. Union Bank of India also announced a cut in its lending rates. This would further bring down the retail lending rates, especially the housing loan, which is linked to prime lending rates.

SBI has informed the stock exchanges that it has decided to revise downward its Benchmark Prime Lending Rate (SBAR) by 25 basis points to 12.25 per cent from 12.50 per cent with effect from February 27. This is the second time the bank cut the rates. Earlier, on February 11, the bank cut the rates by 25 basis points to 12.50 per cent from 12.75 per cent and these rates were effective from February 16.

Bank of India

Bank of India on Wednesday reduced its Prime Lending Rate (PLR) by 50 basis points across the board with effect from February 21. It does a second round of downward revision. Bank of India effected a reduction in its lending rates for retail loans on February 11— 50 basis points for vehicle loans, 100 basis points for educational loans and 250 basis points for consumer loans.

This second reduction on the BPLR coupled with the downward revision done on February 11 has brought down further substantially the lending rates in the retail sectors like housing, personal, vehicle and educational loans, Bank of India stated.

Union Bank of India has revised its Benchmark Prime Lending Rate (BPLR) downwards by 50 basis points to 12.75 per cent from 13.25 per cent effective from February 21. The bank also reduced the on home loan, education loans and other retail loan products. The interest rates on education loans will reduce by 50 basis points, whereas in the case of girl child, the rates are reduced by 100 basis points. The interest rates on Home loans on certain categories also reduced by 25-75 basis points, stated a press release issued by the bank.

Interest rates on term deposits for three years and above also reduced by 50 basis points from 8.75 per cent to 8.25 per cent.