The Hindu Business Line : IDBI to cut PLR by 50 bps

Mumbai, March 26 IDBI said on Wednesday that it is reducing its benchmark prime lending rate by 50 basis points to 12.75 per cent from 13.25 per cent. The new rate will take effect from April 1.

IDBI is one of the last banks among its peers to reduce the benchmark rate.

Other banks such as State Bank of India, Bank of India, Bank of Baroda and Union Bank of India had cut their BPLR last month.

The bank wanted to watch the market and the reactions of other banks, said a senior official.

“We also wanted to save income which is why we are reducing the BPLR with effect from April 1, 2008.

Less than 10 per cent of IDBI’s loans, excluding housing loans, are linked to the BPLR.

“Earlier, IDBI used to give corporate loans at a fixed rate. Only the recent loans we have given as working capital are linked to BPLR. But almost 100 per cent of our housing loan portfolio is linked to the BPLR,” the official said.

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