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SBI slashes prime lending rate by 0.25 percent
New Delhi,
February
12, 2008
Country's largest lender State Bank of India on Monday slashed
prime lending rate by 0.25 percent to 12.50 per cent, a
decision that will make housing and car loans cheaper.
"Benchmark prime lending rate is revised downward by 0.25 per
cent from 12.75 percent to 12.50 percent with effect from
February 16," SBI said in a communication to the Bombay Stock
Exchange.
The reduction in PLR is likely to moderate lending rates for
all category of borrowers, including housing (floating rate),
corporate, car loan etc. The decision follows the up to one
per cent cut in housing and consumer loan rates announced by
Canara Bank and Allahabad Bank.
Housing finance company HDFC and PNB Housing Finance too had
reduced interest rate on housing loan. While HDFC reduced its
RPLR by 0.25 percent effective February 1, PNB Housing Finance
slashed the rates by 0.5 percent.
RBI Governor Y V Reddy, while announcing the quarterly
Monetary Policy review on January 29, had asked bankers to
explore the possibility of reducing interest rates in the
light of high net interest margin.
Even Finance Minister P Chidambaram, after meeting bankers on
January 4, had underlined the need to cut deposit and lending
rates by half a per cent to spur investment and consumption so
that the economy can be sustained on a high growth path.
"I would like, I can't wish this, that banks cut lending and
deposit rates by 50 basis points so that it stimulates
investment and consumption," he had said.
Chidambaram is again meeting heads of public sector banks
tomorrow in the national capital for a review of the banking
sector.
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