Allahabad bank has cut the benchmark prime lending rate (BPLR) by 25 basis points. A statement released by the bank stated that it has brought down its BPLR from the 13.25% to 13% with effect from April 1, 2008. It further said that the reduction has been done in regard to the present market scenario and the need to provide credit to productive sectors at affordable rate.
In a statement given to Reuters Chairman and Managing Director A. C. Mahajan of the bank said the effective PLR will be 13 percent and the effective reduction on floating home loan rates will be 50 basis points after factoring in the PLR cut.
Referring to bulk deposits which comprise about 28 percent of its deposit base, which is expected to reach 700 billion rupees by the end of this financial year on March 31, he said, "The cost of incremental deposits has come down". The cost of deposits in the bulk segment has come down to around 9 percent as compared to 10.5-10.75 percent a year earlier.
He added the bank's bulk deposit base is positioned at 190 billion rupees now. It also plans to bring down the share of bulk deposits and wants to maintain it around 28 percent of its total deposit base.
Bulk deposits refer to high-value deposits, but the upper limit depends on the size of the banks and their deposit base.
Earlier the bank had announced a cut in the interest rate of fresh housing loans by 25 basis points in both floating and fixed term loans with effect from April 01, 2008 for loans up to Rs 20 lakhs on all maturities.
Therefore with the reduction in the BPLR, in actual terms, interest on housing loan up to Rs 20 lakhs in floating term loan will stand reduced by 50 basis points for all fresh sanction effective from April 01, 2008.