Mumbai, May 5: Bank of Baroda (BoB) today announced realignment of deposit rates. The prime lending rate (PLR) was reduced by 0.25 per cent to 10.75 per cent with effect from June 1, 2003, and interest rates on domestic and non-resident external (NRE) deposits were re-aligned.
While deposit rates of short-term maturities were lowered by 25 basis points, long-term deposit rates were raised between 25-50 basis points. The short-term PLR applicable for advances up to 180 days’ maturity would be 10 per cent and the medium-term PLR applicable for loans with maturity of more than one year would be 11.50 per cent, a BoB release said.
Following the Reserve Bank’s move last week to cut bank rate by 25 basis points to 6 per cent and cash reserve ratio by the same margin to 4.5 per cent, BoB announced its rate cuts. In order to extend the benefits of softer interest rate regime to trade, industry and commerce, BoB is bringing down the PLR, it said in the release.
Prior to revision, the bank’s PLR stood at 11 per cent since March 1, 2001 — the lowest in the banking industry for over 21 months. The new PLR at 10.75 per cent continues to be lowest among nationalised banks, it added.
“The rate cut is also in line with the finance ministry’s move to push growth. The cut in PLR will result in across the board reduction in the interest rates on advances to a large number of borrowers of the bank and would benefit to a great extent the agriculture, SSI and small businesses where the bank has substantial exposure,” BoB added.
The bank has already announced reduction in interest rates on priority sector lending up to 2 per cent effective from May 1, 2003.
BoB also realigned its term-deposit rates, both for domestic and for NRE (rupee) deposits, in tune with the prevailing market conditions. The new rates, which will come into effect from May 12, 2003, are 4.25 per cent for 15-45 days, 4.50 per cent for 46-90 days, 4.75 per cent for 91 days to 180 days, 5 per cent for 181 days to less than one year and 5.25 per cent for one year to less than two years.
The interest rate for deposits for two years to less than three years would be 5.50 per cent and the interest rate for deposits for three years and above would be 6 per cent. Additional interest of 0.50 per cent to senior citizens will continue.
Similarly, the interest rates payable on NRE (rupee) deposits will be on a par with those payable on domestic-term deposits. The maturity period of fresh NRE deposits, with immediate effect will be one to three years in line with the FCNR (B) scheme. This will also apply to NRE deposits renewed after their present maturity period, the bank said.
Accordingly, rates for NRE (rupee) deposits for one year to less than two years will be 5.25 per cent, for deposits of two years to less than three years will be 5.50 per cent. The maximum period for NRE (rupee) deposits will now be three years and the rate of interest for three years deposit will be 6 per cent.