MUMBAI: State Bank of India, the country’s largest lender, on Wednesday reduced its prime lending rate (PLR) by 50 basis points effective 29 June. One basis point is a hundredth of a percentage point. The PLR is the rate at which a bank lends to its most creditworthy customers. Following the rate cut, the bank’s PLR stands at 11.75%. Since a 10 June meeting with finance minister Pranab Mukherjee, only the Union Bank of India has reduced its PLR, while IDBI Bank Ltd and Bank of India have cut their deposits rates.
Any rate action by the SBI is usually followed by other banks, and it is expected that other public sector banks will start reducing their rates soon. The lowest PLR so far, at 11.5%, is of Delhi-based Punjab National Bank.