New Delhi, Nov 4 (PTI)

Loans for cars, homes and other commercial items are set to get cheaper with several banks lowering the benchmark lending rate by 50 basis points and the country's largest lender, State Bank of India (SBI), promising to review it later in the week.

"Interest rate cut is on our agenda," SBI Chairman O P Bhatt told reporters today ahead of a meeting of public sector bank chiefs with Finance Minister P Chidambaram here.

Among the banks that have announced reduction in benchmark prime lending rates (PLR) by 50 basis points include the country's third largest lender, Punjab National Bank, and other banks like Uco Bank, IDBI Bank and Union Bank of India.

Reduction in the PLR is significant as interest rates on all loans given by a bank, fixed or floating, are linked to benchmark rates. Interest rates on all individual loans like car, home or personal loans, move up and down along with increase or decrease in PLR.

The latest among the PSU lenders to announce rate cut was Kolkata-based Uco Bank, which has recently undergone capital restructuring. The government had decided to convert its Rs 250 crore equity capital into debt to make the bank more attractive for investors.

"We have decided to cut the PLR by half a per cent," Uco Bank Chairman and Managing Director S K Goel told reporters here, pointing out that the Assets and Liability Committee of the bank would meet on November 10 to review the interest rate scenario.

The largest private sector lender, ICICI Bank, too has said it would review the lending rates after watching the impact of the liquidity injection steps taken by the Reserve Bank last week.