Chennai-based, public sector lender, Indian Bank is set to slash the lending and deposit rates in next 15-20 days, before the pre-budget meeting of the banking chiefs with the finance minister, Pranab Mukherjee, scheduled on June 10.

On Friday, 5 June, M S Sundara Rajan, chief managing director, Indian Bank, said, "We can further cut rates."

The cureent benchmark prime lending rate (BPLR) of the bank is 12.50 percent p.a. The bank offers a rate of 3.50 percent on the domestic & NRO deposits.

Rajan stated that the bank is well capitalised and does not requires government support.

Public sector banks have lowered the benchmark lending rates by 150 basis points over past 6 months. While majority of the banks deny further drastic reduction in the interest rates, the industrial production continues to fall, in pursuit of lower cost funds. Earlier, the finance minister had expressed his hope on banks lowering the lending rates).

The net profit of the Indian Bank for the financial year 2008-09 was Rs.1245.32 crores, with a growth of 23.45 percent. The Board also recommended a dividend of 30 percent for the fiscal.