Union Bank of India today slashed its benchmark prime lending rate (PLR) by 0.50 per cent to 12 per cent per annum, a day after Reserve Bank of India cut key rate by similar percentage points.
The new rate will be effective from April 1, Union Bank of India said in a release.
The cut in the bank's prime lending rate will reduce the interest burden in all PLR-linked advances of the bank.
Union Bank has cut its PLR in four tranches from 14 per cent in November 2008 to 12 per cent with effect from April one, the release said.
Other banks are expected to announce the cut in matter of few days.
Bank of Baroda would also review its asset liability situation and take a call on rate cut, an official of the bank said.
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Yesterday, Kolkata-based UCO Bank had said that the board is meeting on March 7 which will decide about the rate cut.
"With the rate cut, there is good case for rates to come down. Bank is likely to cut its PLR by 25 basis points in its board meeting to be held on March 7," UCO Bank Chairman and Managing Director S K Goel had told PTI yesterday.
As part of monetary softening measure, RBI cut Repo (overnight lending rate) by 50 basis points to 5 per cent and reverse repo (overnight borrowing rate) identically to 3.5 per cent last evening.