Oct. 31: Two days after pruning its deposit rates, State Bank of India (SBI) today announced an across-the-board cut in lending rates.
The country’s largest commercial bank said it has cut the prime lending rate (PLR), medium-term prime lending rate (MTPLR) and short-term advance rate (STAR) by 25 basis points which will take effect tomorrow.
While the new PLR has been pegged at 10.75 per cent, the medium-term rate has been pegged at 11.25 per cent and the short-term rate at 10.25 per cent. In addition, the bank has reduced the spread on advances from 3.5 per cent to 2.5 per cent over the PLR rates.
Meanwhile, Janki Ballabh stepped down today as bank chairman following the end of his term. However, there was no intimation of his replacement.
Uco Bank, United Bank of India and Allahabad Bank—have decided to reduce their deposit rates at least by 25 basis points.
Uco has also decided to reduce its short-term lending rate. But for long-term loans, ranging between one to three years, the PLR will remain intact. “The rates will become effective after a week,” Uco executive director V. Sridhar said.
UBI has however, taken a different view on the PLR cut, preferring to adopt a “wait and watch” policy. “We are reviewing the situation,” bank chairman and managing director Madhukar said. He said that UBI will not go in for a drastic reduction of deposit rates.
Allahabad Bank chairman B. Samal said, “We have taken the decision to reduce the deposit rate by 25 basis points. The rates will become effective from November 1.”
However, the bank is yet to take a decision on PLR cut.