Mumbai, February 12, 2008 - Banking shares were in the lead Tuesday amid a choppy session of trade after the country's largest bank State Bank of India slashed prime lending rates by 0.25 percentage point to 12.5 per cent. In the last few days, Canara Bank, Allahabad Bank, HDFC and PNB Housing Finance have cut housing loan rates by 0.25-1 percentage points and more banks are likely to follow suit.

UCO Bank and Indian Overseas Bank are also expected to reduce prime lending rate by 0.25 per cent after their asset-liability committee meeting later this week.

RBI Governor Y V Reddy, while announcing the quarterly monetary policy review on January 29, had asked bankers to explore the possibility of reducing interest rates in the light of high net interest margin, as per INN. 

At 10:45 am, BSE Bankex was up 0.58 per cent at 9,801.44 after rising to a high of 10,010.35 in trade so far. ICICI Bank (up 2.35%), Punjab National Bank (2.1%), Indian Overseas Bank (1.49%), Bank of Baroda (1.03%) and Andhra Bank (0.95%) were the gainers.