Public sector, Corporation Bank takes cue from the RBI move on rate cut and slashes its benchmark rate like the other PSU banks in the industry.

In a filing to the Bombay Stock Exchange (BSE), the bank said that the Corporation Bank Advance Rate (COBAR) has been slashed by 50 basis points to 12% from 12.5%. The new rate of the bank is applicable from April 1st, 2009.

Until now as many as 13 PSU banks have revised down their benchmark prime lending rate (BPLR) by 25 to 50 basis points.

Out of the 13 lenders, 9 banks including Canara Bank, Central Bank of India, Vijaya Bank, Oriental Bank of Commerce, Union Bank of India, Bank of Baroda, UCO Bank, Punjab & Sind Bank and Corporation Bank have reduced their rates by 50 basis points.

While 4 others like Allahabad Bank, United Bank of India, Dena Bank and Andhra Bank have brought down their PLRs by 25 basis points.

Earlier only the public lenders responded to the call made by the RBI but now even the foreign and private banks have started cutting down their rates.

Recently, HDFC Bank reduced its retail prime lending rate by 50 basis points to 14% and Citibank also lowered its mortgage prime lending rate by 50 basis points to 13.75%.

The rate cut signal has only been prompting to lower their lending rate but the PNB has also slashed its deposit rates.

PNB has been the first lender in the industry to cut the interest rates on fixed deposits at the current stage. It has reduced the fixed deposit rates by 50 to 100 basis points for tenure of less than 3 years.