Banks to realign interest rates

MUMBAI: Taking cue from the 0.25 per cent bank rate cut by Reserve Bank of India, banks are working to realign their interest rates downward.
The bank rate cut is a signal for soft interest regime and banks would realign their lending rates accordingly, SBI chairman A K Purwar said on Tuesday.
Asked about SBI''s plans to reduce rates, Purwar said, "We will study and decide on rate change in next few days". He did not say how large the cut will be.
The funds to be released due to reduction in Cash Reserve Ratio would go in for meeting credit demand and debt obligations including the RIB bonds, he said.
Bank of Baroda chiarman and managing director P S Shenoy said there would be a cut in lending and deposit rates in the range of 25 basis points.
Corporation bank chairman and managing director Cherian Verghese said, "We will fine tune the rates - lending and deposit rates".
Central Bank of India chairman and managing director Dalbir Singh said the policy was a one step forward for the banking reforms to ultimately reach international standards.
Referring to the bank rate cut, Singh, who is also the Indian Banks Association chairman, said there was enough liquidity in the system and hence it was not that relevant.
On whether banks would go in for a further reduction in interest rates, he said it was for the individual entities to decide.