Four more banks cut lending rates

MUMBAI, APR 4: Four more public sector banks have announced a cut in prime lending rates on Tuesday. Bank of Baroda, Bank of India, Bank o...

MUMBAI, APR 4: Four more public sector banks have announced a cut in prime lending rates on Tuesday. Bank of Baroda, Bank of India, Bank of Maharashtra and Indian Overseas Bank on Tuesday slashed their prime lending rates as well as deposit rates. More banks are expected to follow suit later this week.

Of the four public sector banks, Bank of Baroda slashed its PLR by 75 basis points to 11.25 per cent while Bank of India and Indian Overseas Bank reduced their PLR by 50 basis points to 11.5 per cent and 12 per cent, respectively. Bank of Maharashtra cut its PLR by one percentage point from 13.5 per cent to 12.5 per cent with effect from April 4.

Bank of India cut its PLR for loans below three years to 11.50 per cent from 12 per cent and the prime term lending rate PTLR for advances for more than three years to 12 per cent from 12.50 per cent, effective April 3.Indian Overseas Bank cut its PLR and PTLR to 12 per cent as compared to theprevious 12.50 per cent, effective from April 1. The maximum spread over PLR will be restricted to 4 per cent.

In the case of Bank of Baroda, all loans will now attract a prime rate of 11.25 per cent irrespective of their maturity profile as the bank has merged the loan slabs with effect from April 5. quot;Despite the cut, we will be able to mainatain the spread,quot; said a banker.

New generation private sector IndusInd Bank reduced its deposit rates but kept its PLR intact. Bank of Baroda cut its deposit rates by 50 basis points to one percentage point while Bank of India reduced its deposit rates by 50 basis points across the board. Indian Overseas Bank has reduced deposit rates by 50 basis points with effect from April 10.

The new rates will be 4 per cent for 15-30 days, 5.50 per cent for 30-90 days, 6.50 per cent for 91-179 days, 7 per cent for 18 days-1 year, 8.50 per cent for 1-2 years, 9 per cent for 2-3 years and 10 per cent for three years and above. For Bank of Maharashtra, the cut in deposit rates ranged from 50 basis points to one percentage point.

State Bank of India SBI, Industrial Development Bank of India IDBI andIndustrial Finance Corporation of India IFCI reduced their lending rates on Monday.

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The Reserve Bank of India RBI on Saturday cut its key interest rates 8211; the bank rate, cash reserve ratio, repo rate and banks8217; savings deposit rate, triggering a reduction in rates of interest by banks to reposition themselves to the new scenario.

The surge in liquidity saw the 364-day treasury bill auction being oversubscribed by more than twice the notified amount on Tuesday. The yield fell to 9.3151 per cent against 9.9536 per cent at the previous auction. The central bank received 72 bids for Rs 1,012.50 crore as against the notifiedRs 500 crore.

NHB cuts interest rate on housing refinance
NEW DELHI:National Housing Bank NHB today slashed interest rate on refinance to banks, housing finance companies and other financial intermediaries by 0.5-1 per cent for retail credit to construct or acquire new houses.

The cut, with effect from April 1, 2000, was likley to trigger across the board reduction in interest rates on retail loans by banks and housing finance companies, NHB said in a statement here.

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The cut would be maximum of one percentage point in the case of loans above Rs five lakhs and upto Rs 10 lakhs at 12 per cent, NHB said in a statement. The cut would be half a percentage point for loans between Rs 2 lakh and Rs 5 lakh. The interest for the slab now is 12 per cent.

The Apex housing bank also reduced the refinancing ratefor loans between Rs 50,000 and Rs 2 lakh by 50 basis points in the case of urban areas and 25 basis points in rural areas.

There is no change in the interest rate for loans upto Rs 50,000, which would remain at 10 per cent in rural areas and 11 per cent in urban areas, the statement said. The bank said the primary lenders were free to decide the interest to be charged in respect of loans to ultimate borrowers.

Revision in the rates follows cut in interst rate by one per cent on provident fund by government and bank rate by Reserve Bank of India RBI, it said.