Today, the country’s second largest private sector lender HDFC Bank lowered prime lending rate (PLR) 50 basis points and state-owned Union Bank 75 basis points to 12.5 per cent. It comes just two days after the Reserve Bank of India (RBI) announced 100-basis point cuts in key lending rates.

It was informed by HDFC Bank that its benchmark prime lending rate (BPLR) will fall to 16 per cent in two stages. From 15th December, the 25 basis point reduction will come into effect and from 1st January, 2009, a similar cut will also come into effect.

Karvy Stock Broking Limited has maintained ‘buy’ rating on ICICI Bank stock with an intraday target of Rs 390.

According to Karvy, interested traders can purchase the stock above Rs 370 with a strict stop loss of Rs 360. If the stock market remains on positive track, the stock pricing becomes more attractive, and reach above Rs 395.
 

On Saturday, repo rate- the rate at which RBI lends to banks- was cut by the Reserve Bank of India (RBI) by 100 basis points to 6.5 per cent from 7.5 per cent. On the other hand, reverse repo rate- the rate at which banks park excess funds with RBI- was also cut by100 basis points to 5 per cent from 6 per cent, effective from December 8.

But the cash reserve ratio (CRR) has been kept unchanged by RBI at 5.5%. CRR is basically the proportion of deposits banks must keep with the central bank.

RBI is likely to announce further interest revision in its coming policy revision meet on Saturday. The apex bank is likely to cut key interest rates to ease the liquidity situation and propel economy. Banks are preparing to revise home and auto loans in a response to the RBI's move. They said that more infusion of liquidity would help to cut the lending rates to boost demand and hence propel economic growth. 

Indian economy would marginally be impacted by the global slowdown and government would do its best to mitigate the impact. The impact of the global slowdown may increase with time but country has not felt the indirect knock-on effect of the global crisis so far. It is said by the chairman of RBI who was speaking in the sidelines of a seminar on "Mitigating spill-overs and contagion — lessons from the global financial crisis." on Thursday.

The Government has raised the interest assistance provided to the public sector banks by one per cent to three per cent for up to Rs 3 lakh short-term crop loans to agriculturalists for this fiscal in order to incentivise the credit flow to farmers. The amount of subvention is to be calculated on the amount of the crop loan disbursed from the date of disbursement or drawal, up to the date of repayment or up to the date beyond which the outstanding loan becomes overdue, whichever is earlier.