Indian Government Urges Banks to Lower Lending Rates
In a bid to combat the prevailing economic slowdown, the Indian government has advised banks to reduce their lending rates. This move is expected to stimulate economic growth by making credit more accessible and affordable for borrowers.
Finance Minister Meets with Bank Heads
Indian Finance Minister, Mr. P. Chidambaram, held a meeting with the heads of various private and public sector (PSU) banks. During this gathering, he emphasized the need to lower lending rates to counter the economic slowdown effectively.
PSU Banks Lead the Way in Rate Reduction
Several PSU banks promptly responded to the Finance Minister's advisory, announcing reductions in their prime lending rates (PLR) or benchmark lending rates:
- SBI: Lowered PLR to 13%
- Bank of Baroda, Allahabad Bank, Syndicate Bank, Central Bank of India, Oriental Bank of Commerce, and Corporation Bank: Reduced lending rates by 75 basis points (bps) to 13.25%, effective from November 10
- Dena Bank: Cut its PLR from 14.25% to 13.5%
Foreign Banks Join the Rate Cut Initiative
Among foreign banks operating in India, Citibank has also lowered its benchmark lending rate by 50 bps to 15%, with immediate effect.
These rate reductions are aimed at boosting borrowing, investments, and overall economic activity in the country, counteracting the slowdown's impacts.