SBI chairman hints at rate cut, however, Allahabad Bank, BOB and BOI has cut BPLR from 1st April 2009

State Bank of India, India’s largest lender, may cut interest rates in the new financial year on the back of a lower-than-expected credit growth. SBI Chairman O P Bhatt expects that there should be some downward revision in lending as well as deposit rates in the new financial year. He further said that the credit growth this quarter had been lower than expected.

The growth in credit demand during the next financial year would depend on the global economic situation, the timely onset of monsoon and also the new government and its policy stance. SBI has enough liquidity and has not planned to go in for further capital raising.

Meanwhile, Allahabad bank has decided to reduce its Benchmark Prime Lending Rate by 25 basis points from 12.50% to 12.25% effective from 1^st April 2009. The bank indicated that it has also realigned interest rate on term deposits for various maturity periods effective from 1^st April 2009. Bank of Baroda and Bank of India had earlier indicated that they have reduced their BPLR by 50 basis points from 12.50% to 12.0% effective from 1^st April 2009.