PSU banks announce base interest rates, SBI's lowest at 7.5%

Mumbai, Jun 29 (PTI) Ushering in a new interest rate
regime that could make credit cheaper, several Public Sector
Undertakings banks Tuesday announced benchmark base rates of
up to 8 per cent, with State Bank of India's being the lowest
at 7.5 per cent, for giving loans including housing and
commercial at or above it.
Other lenders Punjab National Bank, Union Bank of
India and Central Bank of India fixed the benchmark rate
(minimum lending rate) at 8 per cent as part of the shift to
new regime from July 1, replacing their prime lending rates
that ranged between 11 and 14 per cent per cent.
Bank of Rajasthan, a small private bank being acquired
by ICICI Bank, also came out with 8 per cent base rate. Other
banks, including ICICI Bank and HDFC Bank, are expected to
follow suit soon.
"...in the consumer loan segment, the impact will be
only 25 basis points plus or minus," said State Bank of India
(SBI) Chairman O P Bhatt after announcing new rate regime.
Under the present system, the banks would peg a
prudent PLR but would lend below it if the credit rating of
the borrower is very good.
The new system would not allow banks to lend below the
base rate. As per the RBI, the new regime is aimed at
improving transparency and prevent creation of non-productive
assets.
Under the base rate lending mechanism, borrowers will
be charged interest rates over the base rate depending on
their credit profile. The system, however, will not apply to
concessional loans for agriculture, export and other specified
sectors. MORE PTI DU
KAB


The information contained in this electronic message and any attachments to this
message are intended for the exclusive
use of the addressee(s) and may contain proprietary, confidential or privileged
information. If you are not the intended
recipient, you should not disseminate, distribute or copy this e-mail. Please
notify the sender immediately and destroy
all copies of this message and any attachments contained in it.


Delete & Prev | Delete & Next