Banks to cut interest rates in next few days

Housing, retail and corporate loans will get cheaper as banks will cut lending rates in a few days in response to the RBI's move to lower key short-term lending and borrowing rates by 100 basis points.

Both lending and deposit rates would be cut, Punjab National Bank Chairman and Managing Director K C Chakrabarty told PTI.

"We have reduced the Benchmark Prime Lending Rate (BPLR) as a proactive measure. We are committed to doing so on a continuous basis as and when we feel it is necessary and have the capability to do it," he said.

PNB has the lowest PLR among all banks.

Chakrabarty said PNB will review the asset-liability situation next month to take a view on cutting interest rates further.

Banks that have not cut rates will do so immediately, he said.

Effective December 1, the repo rate will come down to 6.5 per cent while the reverse repo will decline to 5 per cent.

ICICI Bank Joint Managing Director Chanda Kochhar said that policy action is a signal. Interest rates will come down.

When rate cuts will take place and by how much would depend the credit position of banks, she said, adding, the rate cuts would follow cut in deposit rates.

SBI Chairman O P Bhatt had said that his bank was waiting from a signal from the Reserve Bank to take a view on interest rates.