Bank of India (BoI) and Bank of Baroda (BoB) have reduced their BPLRs by 75 basis points each. For BoI, the BPLR cut will come into effect from November 6, while for Bank of Baroda the effective date is November 10.
After revision, the BoB’s BPLR will be at 13.25%. However, unlike BoI which has reduced its deposit rate by 50 basis points effective from December 1, 2008, the BoB has not touched deposit rates as of now. MD Mallya, chairman, Bank of Baroda told FE that ?We will wait and watch for some more time before taking a call on our deposit rates.?
However, other private and foreign banks are yet to take any decision on rates.
?We will follow the large players such as SBI and ICICI Bank. Our credit committee meeting is yet to happen to decide on the same,? said an official with Citibank.
?We haven’t met so far to take a decision on the interest rates,? said the spokesperson of HSBC bank. ?We have still not taken a call on the interest rate front,? said an official from Deutsche bank. However, Standard Chartered Bank was unavailable for comment.
Other PSBs, which a day ago decided to cut lending rates, are looking at reducing deposit rates soon.
Kolkata-based United Bank of India (UBI) is likely to cut rates by the third week of this month, while Syndicate bank is planning the same move before December.
?I think deposit rates have to come down. Most of the banks will bring them down with effect from December 1,? said George Joseph, chairman and managing director of Syndicate Bank.
Joseph was present at a seminar organised by the Confederation of Indian Industry (CII). He said the bank would reduce the rates for deposits for a period of one year to three years by 50 basis points (bps).
?We have already reduced the prime lending rate (PLR), with effect from Tuesday.? Syndicate Bank has reduced its PLR from 14% to 13.25%.
Meanwhile, TM Bhasin, executive director of UBI, said the deposit rates of the bank are likely to come down by the second or third week of November.
UBI had increased the rate last month to 10.5% for deposits for a period of over one year. The bank’s asset and liability committee will meet in the third week of November to reduce the maximum rate of interest on deposits.
UBI is waiting for lending rates to stabilise. ?We should give advantage to depositors who want to deposit or renew at this rate,? Bhasin said.
According to him, investors should not feel that they have cut rates overnight.
Meanwhile, UBI has slashed its PLR by 75 bps to 13.5% from 14.25%. The new rate will be effective from November 10.
