Banks may reduce interest rates

New Delhi: The successive cuts in cash reserve ratio (CRR) ratio by the Reserve Bank of India (RBI) and the sharp fall in inflation has renewed expectations of a interest rate cut by banks.

After Punjab National Bank (PNB) announced that it would be cutting its home loan rates, sources in the Finance Ministry have said that other banks are expected to follow suit.

Sources in the country's largest bank State Bank of India have said the bank will cut deposit rates first before pruning their lending rate.

Meanwhile, PNB has also increased the interest rate it offers to non resident Indians.

The rate on foreign currency non resident deposits and non resident term deposits have been changed across five different currencies.

RBI Governor Duvvuri Subbarao said they are monitoring financial situation on continuous basis and it's too early to say if more steps need to be taken.

Subbarao refused to comment on the markets.

(For updates you can share with your friends, follow IBNLive on Facebook, Twitter, Google+ and Pinterest)