State-run lender Union Bank of India today reduced its benchmark prime lending rate (BPLR) by 50 basis points to 13.5 per cent with immediate effect.
"We have reduced our prime lending rates from today. All loans linked to PLR will now carry lower rate," a Union Bank official told PTI here.
The rate-cut will be applicable for all PLR-related loans including auto, home and corporate loans, the official said.
The move has come shortly after the Reserve Bank slashed its key rates such as cash reserve ratio, statutory liquidity ratio and short-term repo rate with a view to stabilise the liquidity conditions in the banking system.
Interestingly, yesterday, Finance Minister P Chidambaram while hailing RBI's latest policy package, had said he will ask PSU banks to consider lowering lending rates.
Country's second largest public sector lender Punjab National Bank had already reduced its PLR by 0.5 per cent last week, while other leading lender IDBI Bank has also reduced its home and education loans rate following the latest round of RBI policy action.
Though India's largest lender State Bank of India is yet to take a view on any possible reduction in their lending rates, the bank is expected to revise its rates downward in the near future.
Other banks are also likely to take a call on their interest rates in the coming days.
