Indian Bank has reduced its Benchmark Prime Lending Rate (BPLR) by 50 basis points from 12.50 percent to 12 percent with effect from 01-07-2009.
The revised rate will be applicable on new and existing FRR-linked credit advances, including export credit /gold card scheme, third party advances and rupee loans to third parties against FCNR Deposits.
However, interest rate on crop- and agri-jewel loans (upto Rs. 3 lakhs) under the Interest Subvention Scheme, will be continued at the prevailing rate of 7 percent p.a. The bank will also offer export advances 250 basis points below the benchmark prime lending rate (revised rate at 12 percent p.a.).
According to existing guidelines, the bank cannot quote rates exceeding the set BPLR for credit advances (which includes the short-term working capital loans and other long-term loans). This is however not applicable on personal loans and other consumer advances.
Retail credit advances and credits above Rs.2.00 lakh, are offered at price with full-spread.
The difference between the rate of lending and rate of deposit is called spread. Presently the maximum spread is up to 4 percent above BPLR for retail advances and up to 2 percent for priority sector lendings above Rs.3 lakhs.
The bank has also revised interest rates on FCNR (B) and NRE deposits upwards with effect from 01-07-2009.
Recently, country's largest lender, SBI, lowered its Benchmark Prime Lending Rate (SBAR) by 50 basis to 11.75 percent p.a. with effect from 29th June 2009, with other players following the suit.