Mumbai, Dec. 29: Three public sector lenders — Punjab National Bank, Bank of Baroda and Dena Bank — have reduced their benchmark lending rates by up to 75 basis points with effect from January 1.

In a statement, PNB said, “With the 50-basis-point reduction, the benchmark prime lending rate (BPLR) would come down to 12 per cent from 12.50 per cent.”

The bank has also brought down its deposit rates by 25-125 basis points across various maturities. For deposits of one year to less than three years, the rate has been cut 100 basis points to 8.5 per cent.

In a letter to the Bombay Stock Exchange, Bank of Baroda said, “The bank has decided to reduce its BPLR by 75 basis points from 13.25 per cent to 12.50 per cent.”

Dena Bank also said it would cut its BPLR from 13.5 per cent to 12.75 per cent beginning next year.

K.C. Chakrabarty, PNB chairman and managing director, said, “We must respond to the signal given by the Reserve Bank of India.’’

However, the cut in the benchmark rates, which would result in lower equated monthly instalments for the bank’s existing home loan borrowers, would not impact PNB’s margins.

Chakrabarty said the bank had slashed deposit rates to protect its margins. He expects another 100-basis-point reduction in deposit rates by June next year.

PNB expects a loan growth of around 30 per cent in the current financial year. At present, the bank is experiencing a loan growth of around 34 per cent.