HDFC Bank, the country's second largest private sector lender, today reduced its benchmark lending rate (PLR) by 50 basis points to 16 per cent, pursuant to liberal monetary policy announced by the Reserve Bank of India on Saturday.
The drop in the PLR is pursuant to reduction in the banks incremental cost of funds and the significant easing seen recently in the monetary stands and the local currency money markets, HDFC Bank Executive Director Paresh Sukthankar said in a statement.
However, top five PSU banks hve reduced their benchmark prime lending rate from 13.75-14 per cent as on October 1 to 13-13.5 per cent at present.
The statement said a rate cut will be effective in two tranches of 25 basis points each, the first from December 15 and the second from January 1, 2009.
Last week, the bank had cut the deposit rate ranging in between 50 basis points and 225 basis points across various maturities.
The fixed deposit rates have been reduced across four maturities and the peak deposit rate of the bank has come down to 10 per cent, an HDFC Bank spokesperson said.
More From This Section
On Saturday, RBI reduced the short-term lending rate (repo) by 100 basis points to 6.5 per cent and borrowing (reverse repo) rate to 5 per cent from 6 per cent.
Soon after the policy rate cut, new generation private sector lender, Yes Bank had announced reduction in PLR by 50 basis points to 16.5 per cent from 17 per cent.