SBI slashes deposit rates; benchmark PLR at 10.25%
Mumbai: State Bank of India (SBI) has fixed its benchmark prime lending rate (PLR) at 10.25 per cent, effecting a cut of 0.25 percentage point from the existing rate. The bank has also announced a deposit rate cut of 0.25 percentage point in particular maturities. The new lending rate to be called State Bank Advanced Rate and will be effective 1 January 2004. With this tenor linked prime lending rates will be discontinued, according to a press release from the bank.

All existing borrowers of loans with rates presently linked to the PLR, State Bank Medium Term Lending Rate and State Bank Short Term Advance Rate will now be linked to the new rate, and will therefore, enjoy a reduction of 25 basis points in terms of interest rate with effect from 1 January. In recent weeks, three major banks have snipped their benchmark PLR in response to the Reserve Bank of India suggesting to banks to determine benchmark PLR by taking into account actual cost of funds, operating expenses and a minimum margin to cover regulatory requirement of provisioning/capital charge and profit margin.
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UTI Bank to buy stake in two Shriram group firms
Chennai: UTI Bank will pick up a little over 5 per cent stake in two Shriram group companies, Shriram Investments Ltd and Shriram Transport Finance Company Ltd. The bank has an arrangement with the Shriram group, under which it makes available funds for the Shriram group companies to lend to its customers.

Alongside, the promoters of the Shriram group, through the closely held company Shriram Chits & Investments P Ltd, will also raise their stake in the two companies. In Shriram Investments, the promoters will raise their holding by around 9 per cent, on the post-expanded capital of Rs 45 crore. In Shriram Transport, the promoters' stake will go up by around 7.5 per cent, company officials were quoted as saying.
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