Sbi, Union Bank & Boi To Cut Plr Cuts

State Bank of India (SBI) and Union Bank of India will kick off prime lending rate cuts by various banks, following Wednesdays reduction in the bank rate. Sources expect their PLR cuts to be in the range of 50 to 100 basis points.

SBI is attempting to move up its board meeting, scheduled for July 1, to June 28 to discuss the issue. Interest rates on deposits with maturity between 30 days and one year effectively stand reduced by one percentage point to 8 per cent.

However, the slab-wise reduction will be debated by the board, a senior SBI official told Business Standard.

 

Union Bank of India has decided to reduce its deposit rates, but has not yet announced the revised rates. We have to go to the committee of directors, we should only decide whether to cut deposit rates across the board or make some changes. However, interest rates on deposits up to one year stand immediately reduced to 8 per cent from 9 per cent. A cut in PLR would be finalised in a couple of days, said Union Bank of India chairman and managing director A T Pannirselvam.

Deposit rates with maturities up to one year have been reduced in tandem with the bank rate movement by most banks.

However, many are awaiting clearance for such a move from their respective boards. Banks offer the same argument the need to obtain board approval for the delay in reduction of PLR. But banking sources say the real reason is that all the banks are waiting and watching to see who makes the first move.ICICI Bank has reduced its deposit rates by 50-100 basis points, depending on

the maturity profile of the deposits. The rate for deposits for 30 to 90 days has been reduced to 7 per cent from 7.5 per cent, while the rate for periods between 91 and 365 days has been revised to 8 per cent, against the earlier 9 per cent. Senior bank officials said the board is considering reducing its PLR shortly, although no decision has yet been taken on the extent of the cut.

Interestingly, HDFC Bank has also reduced its deposit rates while simultaneously removing the deposit period slabs within a one-year period. The revised rates offer 8 per cent for deposits for 30 days to one year, against the earlier 8 per cent, 8.5 per cent and 9 per cent for deposit slabs upto 1 year. However, the rates remain unchanged for periods beyond one year. The banks PLR is unchanged at 16 per cent and nothing is immediately on the cards, said HDFC Bank sources.

Bank of India has also decided to reduce its deposit rates as well as its PLR. However, it has deferred the revised structure by a week. Our board meeting is scheduled on July 2 and we have kept guidelines on the new deposit rates on the board agenda. We will announce the new rates only after the board approves the new rate structure. The PLR cut will also be announced after board approval, said Bank of India chairman and managing director M G Bhide.

We are waiting for the board meeting in July. Interest rate on deposits up to one year has been reduced by one percentage point to 8 per cent from 9 per cent. Our PLR currently stands at 14 per cent. The board of directors will have to take a decision on any reduction in PLR, said Bank of Baroda executive director K V Krishnamurthy. the maturity profile of the deposits. The rate for deposits for 30 to 90 days has been reduced to 7 per cent from 7.5 per cent, while the rate for periods between 91 and 365 days has been revised to 8 per cent, against the earlier 9 per cent.

Senior bank officials said the board is considering reducing its PLR shortly, although no decision has yet been taken on the extent of the cut.

Interestingly, HDFC Bank has also reduced its deposit rates while simultaneously removing the deposit period slabs within a one-year period.

The revised rates offer 8 per cent for deposits for 30 days to one year, against the earlier 8 per cent, 8.5 per cent and 9 per cent for deposit slabs up to one year.

However, the rates remain unchanged for periods beyond one year.

The banks prime lending rate is unchanged at 16 per cent and nothing is immediately on the cards, said sources in the HDFC Bank.

Bank of India has also decided to reduce its deposit rates as well as its PLR.

However, it has deferred the revised structure by a week.

Our board meeting is scheduled on July 2 and we have kept guidelines on the new deposit rates on the board agenda, Bank of India chairman and managing director M G Bhide said.

We will announce the new rates only after the board approves the new rate structure, he added.

The PLR cut will also be announced after board approval, the Bank of India chairman added.

We are waiting for the board meeting in July, Bank of Baroda executive director K V Krishnamurthy.

Interest rate on deposits up to one year has been reduced by one percentage point to 8 per cent from 9 per cent. Our prime lending rate currently stands at 14 per cent, the Bank of Baroda executive director said.

The board of directors will have to take a decision on any reduction in the prime lending rate, Krishnamurthy added.