Last Saturday the Reserve Bank of India (RBI) took measures to ease liquidity. RBI had reduced Cash Reserve Ratio (CRR) following this public sector banks (PSBs) have started cutting their benchmark prime lending rates (BPLR). The cut in BPLR is definitely going to benefit retail borrowers and India Inc. For instance Union Bank of
“We have reduced our BPLR by 50 basis points on account of the 350 basis points reduction in the Cash Reserve Ratio (CRR) affected by RBI. The bank does not earn anything on the funds impounded under CRR. Thanks to the CRR cut, we can now deploy the funds released at an average yield of 10.50 per cent,” said Mr M.V. Nair, Chairman and Managing Director, Union Bank of
Previously, the bank had reduced interest rates on home loans by 50 basis points with effect from October 21. Mr Nair informed the bank is also deciding to withdraw its 900-days fixed deposit scheme, under which it is offering a high interest rate of 10.5 per cent.
As per press release issued by the United Bank of
The release stated that the rate cut will be applicable to educational loan, housing loan, SMEs and other loans. The reduced lending rate would also be applicable for existing loan accounts.
“Further cut in the rate of interest on advances will be considered by the bank, commensurate with the decrease in the rate of deposits in the next week,” the release added.
Earlier in the last week, Punjab National Bank had cut its prime lending rate by 50 basis points to 13.5 per cent. Likewise, IDBI Bank had also announced a 50 basis points reduction in the interest rates on home loans to 11 per cent although it has raised the margin on home loans from 15 per cent to 20 per cent for loans up to Rs 30 lakh and to 25 per cent for loans over Rs 30 lakh. The bank has also implemented a 50 basis points reduction in education loans.
1 comment:
It is learnt that ICICI bank has lowered their PLR by 1.5%, but made it applicable only to new loans and not to existing loans. Isn't it cheating and short changing by the bank of its existing customers. They have been very meticulous in effecting all upward revision in PLR and FRR equally applicable to existing as well as new loans every time a CRR, Repo or reverse repo revision was announced. RBI and Banking Ombudsman should take note of this unethical trade and business practice being followed by ICICI bank.
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