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Banks in India cut lending and deposit rates further

The banks in India have deepened the interest rate cuts announced earlier.



The good news for borrowers continues – almost all major banks in India have announced interest rate cuts. This has been done anticipating further rate cuts from the Reserve Bank of India (RBI). The new rate is effective 1st January 2009 for most of the banks.

This is the second wave – third for some banks – of interest rate cuts in recent times. (Please read “Banks in India start cutting lending and deposit rates” for the first round of rate cuts). For many banks, this is a second rate cut in just one month.

It should be noted that RBI is widely expected to cut interest rates following the reduction in the prevailing rate of inflation.


State Bank of India (SBI)

SBI has announced a 0.75% reduction in its Benchmark Prime Lending Rate (BPLR) – from 13% to 12.25% per year.

ICICI Bank

Although no rate cuts have been announced, ICICI Bank is expected to reduce its rates by 0.5% to 0.75% in the near future.

Punjab National Bank (PNB)

PNB has announced a 0.5% reduction in its Benchmark Prime Lending Rate (BPLR) – from 12.5% to 12%.

It has also reduced the interest offered on fixed deposits (FDs). For example, the rate for deposits with tenure between 1 – 3 years is now 8.5%, down 1% from the earlier 9.5%.

PNB has also decreased the interest on floating rates home loans and fixed rate car loans by 0.5%.


Bank of Baroda (BoB)

BoB has announced a 0.75% reduction in its Benchmark Prime Lending Rate (BPLR) – from 13.25% to 12.5%.

Bank of India (BoI)

BoI has announced a 0.75% reduction in its Benchmark Prime Lending Rate (BPLR) – from 13.25% to 12.5%.

Dena Bank

BoI has announced a 0.75% reduction in its Benchmark Prime Lending Rate (BPLR) – from 13.5% to 12.75%.

It has also cut the interest offered on fixed deposits (FDs) by 0.25% to 1% depending on the duration of the deposit.

IDBI Bank

IDBI Bank has not changed its Benchmark Prime Lending Rate (BPLR). But it has cut the interest offered on fixed deposits (FDs) by 0.5% to 1.5% depending on the tenure of the deposit.

It is also introducing a new deposit term of 1100 days, which would carry an interest rate of 9.5% per annum.


Union Bank of India (UBI)

UBI has announced a 0.75% reduction in its Benchmark Prime Lending Rate (BPLR) – from 13.25% to 12.5%.

Corporation Bank

Corporation Bank has announced a 0.75% reduction in its Benchmark Prime Lending Rate (BPLR) – from 13.25% to 12.5%.

Canara Bank

Canara Bank has announced a 0.75% reduction in its Benchmark Prime Lending Rate (BPLR).

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