SBI had reduced its Benchmark Prime Lending Rate by 75 points in January 1, 2009 and SBI had reduced deposit rate by 25 points across all maturities to bring down cost of funds. SBI cuts its BPLR rate by 50 basis points effective from June 29, 2009.
SBI rate cut comes within a fortnight of Finance Minister Pranab Mukherjee asking state-owned banks to soften rates. Other lenders will soon follow SBI and borrowers will get car loans, home loans and other loans for cheaper rate.
SBI has recently reduced its deposit rate by 25 points. The rate of deposit for 1000 days tenure was reduced from 7.75 to 7.50 per cent, for deposit 2 years or less than 1000 days the rate was cut from 7.50 to 7.25 per cent. The rate for deposit from 1 year to less than 2 years was reduced from 7.25 to 7 per cent and the deposit for tenure of 181 days and less than one year the rate is 6.25 against 6.50 per cent.
The new rate for BPLR will be 11.75 per cent against current rate of 12.25 per cent. This will be effective from June 29, 2009.