PNB cuts PLR by 50 bps

After announcing their third quarter results on Friday,Punjab National Bank PNB announced a 50 basis points bps cut in its prime lending rates to 11.50 per cent effective from February 1,2009. The move is expected to push other banks also to follow suit making credit cheaper across the board. The sectors that are to benefit most are automobiles,home loans,education loans,agriculture and micro,small amp; medium enterprises.

PNB simultaneously cut deposit rates so as to make the interest rate decline more feasible. It announced 25-100 bps deposit rate cut,which would result in a maximum interest yield of 8 per cent on term deposits between one and three years. All loans related to our benchmark prime lending rates would get cheaper, said chairman PNB K C Chakrabarty.

Bucking the slowdown in the economy,PNB registered 85.76 per cent growth in its net profit for the third quarter of the current fiscal. The net profit of the bank rose to Rs 1005.82 crore for the third quarter of financial year 2008-09 as against Rs 541.46 crore in the corresponding period last year. PNB had become the countrys first public sector bank to earn a profit of over Rs 1,000 crore in a single quarter,Chakrabarty claimed. The operating profit of the bank also went up by 82.17 per cent for the third quarter of 2008-09 at Rs 1805.94 crore compared to the same period last fiscal.