Mumbai: In a move that will make housing and auto loans cheaper, four public sector banks, led by State bank of India, today announced slashing their Prime Lending Rates by 0.25-0.50%.
For the second time in less than 10 days, the country’s largest lender SBI slashed Prime Lending Rate by 0.25% to 12.25%. The bank had announced, on 11 February 2008, cutting the PLR by 0.25% effective from 16 February.
“Benchmark Prime Lending Rate (PLR) is revised downward by 0.25% from 12.50% to 12.25% with effect from 27 February ,” SBI said in a communique 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 loans.
Bank of India and Union Bank also announced reduction in PLR by 0.5% to 12.75% today.
Bangalore-based Canara Bank also cut PLR by 0.25% to 12.75%.
Earlier last month, housing finance company HDFC and PNB Housing Finance too had reduced interest rate on housing loan.
While HDFC reduced its PLR by 0.25% effective 1 February, PNB Housing Finance slashed the rates by 0.5%.
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.