SBI, Canara cut rates again

In a concerted move, four public sector banks today cut their benchmark prime lending rates (PLRs). State Bank of India (SBI), the country’s largest bank, and Canara Bank cut their PLRs by 25 basis points for the second time in just over a week, while Bank of India (BoI) and Union Bank lowered their PLRs by 50 basis points.

The reductions in lending rates follow a lunch meeting of chairmen of large public sector banks last week to discuss the lowering of interest rates across the board, following finance minister P Chidambaram’s appeal to banks on February 12 to make credit affordable and to help negate the impact of slowing credit on the growth of the economy.

Another public sector bank, Bank of Baroda’s asset liability committee meets tomorrow to take a call on cutting its PLR. Punjab National Bank (PNB) could not be reached to ascertain its call on cutting its lending rates. PNB Chairman, KC Chakraborty had also attended the lunch meeting.

SBI and Canara Bank had reduced their PLRs by 25 basis points on February 11, a day before Chidambaram met chairmen of public sector banks to assess the performance of the government-owned banks in the third quarter of 2007-08.