BackIndian Bank cuts deposit rates, Uco to follow suit in Jan
Indian Bank cuts deposit rates, Uco to follow suit in Jan
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Mumbai: State-owned Indian Bank on Tuesday slashed deposit rates and another nationalized bank Uco Bank said it would follow suit in what could signal a softening lending rate regime in the public sector space in the near term.
While Chennai-based Indian Bank cut its deposit rates across various maturities by up to 1.5 percentage points effective from 15 December, Kolkata-headquartered Uco Bank has indicated around a 100 basis point reduction in deposit rates from 1 January.
“With inflation declining to 8% and the liquidity position in the system improving substantially, banks may now find it easier to reduce their deposit rates. We plan to cut our deposit rates from 1 January," Uco Bank chairman and managing director S.K. Goel said.
He, however, declined to mention the extent of the cut, saying the bank’s asset-liability committee would meet on 26 December to decide on the issue.
Asked whether Uco Bank would reduce the rates by 75 basis points, he said, “It is difficult to say now. It could be 100 basis points. However, we will link that with the inflation rates."
The lender is contemplating in excess of a 100 basis point cut, a source close to the development said.
Goel said the bank might also look at reducing its prime lending rate (PLR) by early next year. “It (a further cut in PLR) can happen in January."
Asked whether the bank had received any directive from the Union finance ministry regarding lowering rates, Goel replied in the negative.
Though public sector banks on Monday announced a slew of measures to push up lending in the home loan segment below Rs20 lakh, the package did not extend relief to existing home loan customers.
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