State-run, Allahabad Bank has declared a 25 basis point reduction in its benchmark prime lending rate (BPLR) to 12 percent from the earlier 12.25 percent.

The revised rates will come into effect from July 1, 2009.

"The reduction in BPLR has been announced having regard to the declining trend in interest rates and current market scenario and other relevant factors, " the bank said in a statement.

The revised rates will be applicable on all fresh and existing credit advances at floating rates linked to BPLR.

Earlier, the bank reduced BPLR by 25 basis points to 12.25 percent from the 12.50 percent, with effect from 1st April, 2009.

The bank has also lowered deposit rates on its various domestic term deposits, including recurring deposit and capital gains accounts scheme 1988, with effect from July 1, 2009.

Several banks have been lining up to reduce the lending rates, weeks after the meeting between the Union Finance Minister Pranab Mukherjee and top offcials of the PSBs, held on 10 June, 2009, where the minister urged the bankers to severe the lending rates considering the overall economic interests. The Union Bank of India reduced its BPLR by 25-basis-point to 11.75 percent p.a., from the earlier 12 percent p.a. with effect from July 1.

The State Bank of India and its associate bank- State Bank of Mysore, both reduced BPLR by 50 bps to 11.75 percent p.a. and 12.25 percent p.a. respectively, with effect from June 29, 2009.

Esatblished in 1865, by a group of Europeans, Allahabad Bank is the oldest public sector bank in India. The bank was taken over in 1920 by P&O Banking Corporation and nationalized in 1969 with 13 other banks.