The major public sector banks including State Bank of India (SBI) and Bank of India (BoI) are doing robust efforts to attract more and more customers. They have slashed their lending rates for the second time this month by 25 basis points.

Canara Bank has also announced a fresh cut of similar proportion.

Mr. M B N Rao, chairman and managing director Canara Bank said that the reduction in lending rates will enable them to rationalize their deposit cost structure.

Canara's BPLR now stands at 12.75% and SBI’s at 12.25%.

This second reduction on the BPLR coupled with the downward revision done on February 11, has inflicted further substantially the lending rates in the retail sectors such as housing, personal, vehicle and educational loans.

The banking institutions desire that a decrease in BPLR will help in generating demand for the above loans.

Union Bank of India (UBI) also cut its BPLR by 50 bps from to 12.75% from 13.25% effective February 21.

Later this week other public banks like IDBI and Punjab National Bank will also meet to cut rates. Chances are these banks will also cut rates by a minimum of 50 basis points.