Indian Overseas Bank cuts lending rate by 0.5%

Indian Overseas Bank (IOB) today slashed benchmark prime lending rate (PLR) by 0.5 per cent to 12 per cent in line with its peers.

The PLR has been reduced to 12 per cent from existing 12.5 per cent effective tomorrow, IOB said in a filing to the Bombay Stock Exchange.

The revised PLR would be applicable to all existing and new accounts where the floating interest rate is linked to PLR.

Last week, the country's largest lender, SBI, reduced its benchmark lending rate by half a percentage point to 11.75 per cent.

The PLR was revised down by 50 basis points effective June 29.

SBI last reduced the PLR by 75 basis points with effect from January 1, 2009.

Following the decision of SBI, many other public sector lenders, including Allahabad Bank, too reduced PLR by 50 basis points.

Union Bank of India and IDBI Bank also softened its lending rate by 0.25 per cent effective July 1.

State Bank of Mysore, an associate of SBI, slashed its lending rate by 50 basis points to 12.25 per cent while deposit rates were cut by 25 basis points.