PNB, BOB cut interest rates up to 100 bps

Mumbai, Dec 29 (PTI) Two leading Indian public sector
lenders Punjab National Bank (PNB) and Bank of Baroda (BOB)
Monday said they will reduce their prime lending rate by 50
and 75 basis points, respectively with effect from January 1.

Besides, PNB also announced a reduction in its peak
deposit rate by 100 basis points to 8.5 percent for deposits
of one year to less than three years beginning new year, the
state-run lender said in a filing to the Bombay Stock
Exchange (BSE).

Earlier this month, the bank had reduced its peak deposit
rate to 9.50 percent from 10.5 percent.

In a separate regulatory filing to the BSE, Bank of
Baroda said "The bank has decided to reduce its Benchmark
Prime Lending Rate (BPLR) by 75 basis points from existing
13.25 percent to 12.50 percent with effect from January 1,
2009."

The BPLR of PNB would stand reduced to 12 percent, from
the existing 12.50 percent, effective from January 1.

With the revision, PNB's deposits having maturities of 46
days and above will attract an interest rate of 1.25 percent
from the earlier 1.50 percent, the filing said.

Besides, the country's second largest private sector
lender has also reduced interest rates on various retail
lending schemes such as floating rate housing loans, car and
education loans by 50 bps.

"The interest rates on fixed rate housing loans have been
reduced by up to 175 basis points with effect from January 1,"
PNB added.

Further, the bank has introduced a housing loan scheme
-- PNB Special Housing Loan Scheme-- for new accounts from
January 1, 2009, till June 30, 2009.

Under the fixed housing loan of up to Rs five lakhs for
maximum period of 20 years, PNB would charge interest rate at
8.5 percent.

Also fixed rate housing loans of above Rs five lakhs to
Rs 20 lakhs for a maximum period of up to 20 years would
attract interest of up to 9.25 percent.

"The interest rate will be subjected to reset on July 1,
2014, for the scheme," PNB added.

The rate cut came shortly after country's largest lender
State Bank of India announced a 0.75 percentage point cut in
its prime lending rate and a 0.25-1 percentage point reduction
in deposit rates from January 1.

Also other leading state-owned lender Union Bank of India
reduced its deposit rates and Canara Bank announced reductions
in their deposit and MSME lending rates.

Shares of PNB were trading at Rs 498.65, down 1.69
percent and BOB shares were down 2.10 percent at Rs 262.90 on
BSE. PTI JD
AM