State-run banks in India are cutting their lending rates

After State Bank of India reduced its lending rate last week, other state-run banks in India are slashing their lending rates. Indian Bank slashed its lending rate by 50 basis points from 12.5% to 12% that started from July 1, 2009. Indian Overseas Bank (IOB), another state-run bank announced to cut its lending rate by 0.5% to 12%. This comes in the face of State Bank of India, the largest Indian bank slashed its lending rate by 11.75% last week. The Times of India reports:

The benchmark prime lending rate (BPLR) was revised downwards by 50 basis points effective from June 29. SBI had last reduced BPLR by 75 basis points on January 1, 2009. Following SBI's move, many other public sector lenders, including Allahabad Bank, reduced BPLR by 50 basis points.

In order to attract more customers the banks are now softening their lending rates. Union Bank of India and IDBI Bank are cutting its lending rate by 0.25% that also comes into effect from July 1. State Bank of Mysore, cut its lending rate by 50 basis points and deposit rate by 25 basis points.

Related articles:

The Times of India

Business Standard