The country's second largest private sector lender HDFC Bank today slashed benchmark lending rate by 25 basis points to 15.75 per cent.

Benchmark Prime Lending Rate has been reduced to 15.75 per cent per annum with effect from July 20, HDFC Bank said on its website. The cut in lending rate follows the reduction in the fixed deposits rate effective from May 18.     

Also Read   Related Stories News Now - Consistent performer - Crossing 4,390 key for the rally - State Bank of Indore net up 82% at Rs 77 cr in Apr-Jun - Govt considering introduction of Banking Regulation Bill - Govt borrowings not to raise lending rates: PNB - Ratio of volatile capital to forex reserves moves up in FY09

Also Read   Related Stories News Now - Markets come off day highs - IGC lowers world wheat output for 2012-13 to 671 mn tonne - Oil india Q4 net down 21% at Rs 445 cr - Synthetic rubber consumption up 2% in Feb, output falls - Not mulling hike in diesel, LPG prices: Reddy More

Private sector lenders mostly give loans below PLR. However, some of the corporate loans are linked to the benchmark rate.     

Thus, to study the relevance of PLR in the changed scenario, the Reserve Bank last month constituted six-member working group to review the Benchmark Prime Lending Rate (BPLR) system and suggest a mechanism for pricing of floating rate loans, a move that will improve transparency in fixation of interest rates on housing loans by banks.     

The working group, chaired by RBI Executive Director Deepak Mohanty comprises J P Morgan India chief economist Jahangir Aziz and Indian Institute of Management (IIM) Ahmedabad Professor as its members.

Besides them, other members include RBI chief general manager P Vijaya Bhaskar and Janak Raj, advisor-in-charge in the monetary policy department of the central bank and RBI's monetary policy department director Himanshu Joshi, who is a member secretary.

"The working group may co-opt any other members as special invitees and may consult with all stakeholders," the RBI said in a release.

The group is expected to submit its report by end-August 2009. It will suggest a suitable benchmark for floating rate loans in the retail segment.     

Moreover, it will also recommend an appropriate loan pricing system based on international best practices, it had said, adding the review is being done to make credit pricing more transparent.

New Ipad Application :Business Standard's all new IPad App Click here to download for free Other Stories      - Markets come off day highs - IGC lowers world wheat output for 2012-13 to 671 mn tonne - Oil india Q4 net down 21% at Rs 445 cr - Synthetic rubber consumption up 2% in Feb, output falls - Not mulling hike in diesel, LPG prices: Reddy

Tags : HDFC Bank | Banking | Benchmark Prime Lending Rate | Prime Lending Rate | RBI |   Read Business news in  Advertisements -  Benefits Upto Rs. 2.36 Lakhs on the Fully Loaded TJet Petrol. -  Journey on, We are by Your Side. Click here to know more -  Help a Child Achieve her. Click to know more -  2 Lac Apartments, 1 Lac House / Plots. Click here -  Benefits Upto Rs. 2.36 Lakhs on the Fully Loaded TJet Petrol. -  Watch The Film Here. Click here to know more.. -  Leader in Passenger Car & Automobile Tyres. Click here -  1 billion in saving for Unilever without any tangles. -  Learn How One City is Running on FOOD SCRAPS. -  One Partnership Endless Possibilities. Click here to know more -  Helping doctors detect diseases earlier, saving costs & extending lives. -  36 Lakhs can get you a pool of Luxuries. Click here -  Which is the best plan for your daughter -  Check out the TRUE COLOURS of your Stocks, Now for FREE! -  One of the leading business schools in the world.Know More