Punjab National Bank on Sunday cut lending rate by 70 basis points 8.20% from 8.90%. The decision came after State Bank of India’s rate cut by 90 basis points. Banks have received an estimated 14.9 trillion rupees ($219.30 billion) in old 500, and 1,000 rupees notes from depositors since the government in Nov. 8 unexpectedly banned the banknotes in a bid to fight counterfeiting and bring unaccounted cash to the economy.
That had raised expectations banks would have room to cut lending rates, which is seen as vital to increase credit growth and spark a revival in private investments.
Welcome reduction of interest rates by SBI. Loan disbursements expected to pick up. Positive for the economy.
— Shaktikanta Das (@DasShaktikanta) January 1, 2017
Although India’s gross domestic product grew 7.3 percent in the July-September quarter from a year earlier, the fastest pace of growth among large economies, much of that has been led by consumer demand.
with agency inputs