Dena Pares Plr By 50 Bps

Dena Bank has decided to cut its prime lending rate (PLR) by 50 basis points from 15 per cent to 14.5 per cent. Speaking to the Business Standard, Ramesh Mishra, chairman and managing director, Dena Bank, said the maximum spread over PLR will be 3.5 per cent.

Dena Bank is now offering a 12 per cent rate of interest on deposits of over three years while deposits of between two to three years are being offered an interest rate of 11 per cent. Deposits of one to two years are being offered a rate of interest of 10 per cent.

Earlier, Dena bank was offering loans to some of its clients at interest rates ranging from 16.5 per cent to 21 per cent. After the October 1996 credit policy, the bank was able to offer funds at rates ranging from 15 to 19 per cent.

With the fresh cut in its PLR, the bank will be able to extend funds at still cheaper rates.

Dena Bank is expected to end the year with a 17 per cent rise in its deposit base. Advances are seen rising by only nine per cent. This is attributed to the low offtake of credit during the 1996-97 fiscal.

Meanwhile, ANZ Grindlays Bank has cut its PLR by 100 basis points to 16 per cent which will be effective from April 25. The ANZ Grindlays board has revised its PLR downwards as a result of the new credit policy announced on April 15.

Grindlays believes the revision of the PLR will lead to increased disbursements in rupee lending, especially to the infrastructure sector, which is in keeping with the objectives of the new credit policy.

Other banks that have already brought about a cut in PLRs in line with the credit policy include the State Bank of India, Bank of Baroda and Corporation Bank which have scaled down lending rates to 14 per cent.