Loans Expert

Happy days are here again for high-spending consumers who have taken, or are intending to take, home, car and other personal loans.

Shortly after their meeting with finance minister Mr P Chidambaram, public sector banks led by State Bank of India today gave strong indications that they would cut interest rates for home and car loans by at least 50 basis points. The country’s largest lender, SBI, has promised to review its lending rates later this week.

During the meeting with Mr Chidambaram, the heads of public sector banks discussed ways and means to protect the growth momentum from possible adverse effects of the current global financial meltdown.

After the meeting, heads of banks including UCO Bank and IDBI Bank announced reduction in benchmark Prime Lending Rates (PLR) by 50 basis points. “Interest rate cut is on our agenda,” SBI chairman Mr OP Bhatt had said before the meeting.

Among the banks that have announced reduction in PLR by 50 basis points include the country’s third largest lender, Punjab National Bank, and UCO Bank, IDBI Bank and Union Bank of India.
Reduction in PLR is of prime importance as interest rates on all loans given by a bank, fixed or floating, are linked to the benchmark rate. Interest rates on car, home or personal loans, move up and down along with increase or decrease in PLR.

PNB had announced a cut in lending rates much earlier and the Union Bank of India yesterday. Bank of India also indicated that it would soon take a call on revising interest rates.
The largest private sector lender, ICICI Bank, said it would review the lending rates after watching the impact of the liquidity injection steps taken by RBI last week. On Saturday RBI cut the short-term lending rate by 50 basis points and the cash reserve ratio by 100 basis points.

The meeting came a day after the meeting between the Prime Minister and the industry at which industry leaders sought appropriate measures to enhance liquidity and other steps to create an environment conducive for lowering of interest rates.

NEW DELHI, Nov. 4: Prime Minister Dr Manmohan Singh today constituted an apex group under his chairmanship to coordinate the government’s response on industry’s concerns in the wake of the global financial crisis and its impact on India. The group would comprise Union finance minister Mr P Chidambaram, industry and commerce minister Mr Kamal Nath, Planning Commission deputy chairman Mr Montek Singh Ahluwalia and RBI Governor Dr D Subbarao. n PTI

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Tags: Car Loans, Personal Loans