Union Bank of India today announced a 25-basis-point reduction in its benchmark prime lending rate (BPLR), while United Bank of India would decide on a rate cut next week. Union Bank’s new BPLR of 11.75 per cent would be effective from July 1. The bank has left deposit rates unchanged.
“This is the fifth successive reduction since November 2008 and the bank has reduced a total of 225 basis points in BPLR since November 2008,” Union Bank of India said in a statement.
Meanwhile, Mumbai-based IDBI Bank has decided to cut its interest rate on term deposits by 25-50 basis points across different maturities. The new rates will be effective from June 25. The peak rate on the Suvidha tax saving deposits will be 8 per cent as against the old rate of 8.5 per cent.
Country’s largest lender State Bank of India has reduced deposit rates by 150 basis points in stages in the current financial year to reduce the cost of funds.
Kolkata-headquartered United Bank’s BPLR could go down by 25-50 basis points, bank sources indicated.
The public sector player would decide on a rate cut its asset-liability committee meet next week, Chairman and Managing Director S C Gupta said on the sidelines of a conference.
The moves come after Finance Minister Pranab Mukherjee asked public sector players to lower rates.
While pointing out that rates had been lowered by over 200 basis points between September 2008 and April 2009, Gupta said the small savings scheme hindered banks’ ability to reduce rates. “There is a room for further reduction in interest rates, but the rates on government deposits schemes have to come down,” said Gupta.
