State-owned Punjab National Bank may cut its interest rates further if inflation continues to fall, Chairman K C Chakrabarty said today.
“Last week, PNB cut its benchmark prime lending rate by 50 basis points to 11.5 per cent, which is the lowest among public sector banks,” he said.
Inflation treading lower signals monetary easing by the Reserve Bank of India, which in turn enables banks to cut lending rates.
India’s headline inflation rate is now a little over 5 per cent from a 13-year high of 12.91 per cent early August. This easing trend has prompted the RBI to slash its key policy rates.
Since October, the central bank has cut Repo Rate by 350 bps, Reverse Repo 200 bps and Cash Reserve Ratio 400 bps in a bid to boost liquidity and lift demand in the sagging economy.
Chakrabarty said the bank has no plan to match State Bank of India’s special home loan scheme, in which it has frozen the interest rate on new loans taken till April 30 at 8 per cent for one year.
