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IDBI may lower flexibonds rates

Our Bureau

MUMBAI, Jan. 18

IDBI is set to lower interest rates on its `FlexiBonds' issue, slated to hit the market sometime in mid-February. The institution is also likely to effect a cut in lending rates but a final decision will be taken at its board meeting, scheduled for Janua ry 31.

The Asset-Liability Management Committee (ALCO) of IDBI which met here today, is understood to have suggested a 100 basis points cut in both deposit as well as lending rates. However, IDBI officials refused to comment on the issue and said a final decisi on will be announced only after the board meeting.

ICICI Ltd had on Monday announced the reduction in prime lending rates by about 100 basis points (at the longer end) following the cut in interest rates on small savings and PPF deposit rates by the Government last Friday.

Analysts feel IDBI has been left with no other option but to lower lending rates following the ICICI announcement.