SBI, UBI revised BPLRs

The country’s largest bank, State Bank of India (SBI) has announced cut in its benchmark lending rate by half a percentage point to 11.75 per cent from this home, car and corporate loan customers will be benefited.

SBI informed the Bombay Stock Exchange the BPLR has been reduced by 50 basis points and will be effective from 29 June. At present bank BPLR is at 12.25 per cent. Earlier bank had reduced BPLR in January 2009 by 75 basis points.

It is expected the cut done by SBI will prompt other lenders to follow suit and can lead to greater demand for loans and stimulate consumption.

Before slashing BPLR SBI earlier this month had reduced deposit rates by 25 basis points across all maturities to bring down the cost of funds.

For a period of 181 days to less than one year, the rate has been reduced from 6.50 per cent to 6.25 per cent whereas for one year to less than 2-year, it was cut from 7.25 per cent to seven per cent.

For two-years to less than 1,000 days, the rate has been revised from 7.50 per cent to 7.25 per cent, then for 1,000-day tenure, the rate has been revised from 7.75 per cent to 7.50 per cent.

On the other hand United Bank of India (UBI) has reduced rate by 25 bps. Mr SC Gupta, United Bank of India chairman and managing director made an announcement of a cut in the bank’s BPLR by 25 basis points and will be effective from 1 July. After the revision the BPLR will stand reduced at 12 per cent.

Allahabad Bank a public sector bank informed before taking decision on next round of rate cuts it will take into consideration “several other factors”.

Speaking on the sidelines of a Banking Conclave Allahabad Bank chairman and managing director Mr KR Kamath told reporters, “The rates are being reviewed. The demand that interest rates should be made affordable is there, but several other factors should also be taken into account”.