Public sector lender, Punjab National Bank has decided to lower the benchmark prime lending rates by 100 basis points on Wednesday. It is the second interest rate reduction by the bank in four weeks. Earlier, it had announced to cut the BPLR by 50 basis points on October 31. Now, industry and general public can get credit at low rates in the present credit struck environment.

The revised interest rate would be effective from Monday. The decision may also encourage other banks to revise interest rates.

PNB has revised the benchmark prime lending rate (BPLR) to 12.50 per cent which would be applicable to all existing and new accounts linked with BPLR. The chairman and managing director of the bank, K C Chakrabarty said that it is the need of hour to revise the lending rates to encourage more borrowers. The bank has also decided to reduce the deposit rate from 10.50 per cent a year to
9.50 per cent for one-three years deposits.

HDFC Bank is expected to revise PLR after reviewing the rates at the asset-liability committee meet next week. United Bank of India is likely to consider a 50 basis point reduction in deposit rates on Monday, according to bank's Chairman & Managing Director, S C Gupta.