Mumbai: Setting the ball rolling for a fresh round of cut in interest rates, country's largest bank State Bank of India (SBI) on Saturday announced a 0.75 per cent cut in its prime lending rate which will be effective from January 1.
SBI's PLR now stands reduced at 12.25 per cent, the bank said in a press release on Saturday.
The rate cut came a day after India's largest housing finance company HDFC reduced its interest rates by 50 basis points for loans of more than Rs 20 lakh for both existing and new customers and introduced a new slab for sub-Rs 20 lakh.
Union bank of India, another leading public sector bank had reduced its deposit rates on Friday, while Bangalore-based state-run lender Canara Bank announced reductions in their deposit and MSME lending rates.
With the country's largest lender reducing the PLR, other leading banks are also expected to follow the leader in the next few days, banking sources said.
The bank also cut deposit rates by 0.25-1 per cent, which will again be effective from January 1, across all maturities.
With the revision, 1-2 year deposit rates will now attract an interest rate of 8.5 per cent as against the earlier 9.5 per cent while deposits having two years to less than 1,000 days maturity will attract a 8.75 per cent (nine per cent), the bank said.
Similarly, the 1000-day deposits special deposit scheme, which had offered 10 per cent rates earlier, will now give nine per cent to investors, SBI said.
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