Mumbai, May 31: Small Industries Development Bank of India (Sidbi) has lowered its prime lending rate (PLR) to 11.5% from 12% with effect from June 1. Sidbi’s asset liability management committee which met in Mumbai on Friday also announced a 1.25% reduction in short-term PLR. Short-term PLR has been cut from 11.25% to 10%. Sidbi is the nodal financing agency for SSIs.
As per the budget, SSIs should be charged either 2% higher than the PLR or 2% lower than PLR. Effectively, Sidbi will charge SSIs 9.5-13.5%. SSIs are defined as companies which have originally invested up to Rs 1 crore or less in plant and machinery. Sidbi has also decided to reduce its average cost of funds by prepaying high-cost debt. These include Rs 3,000 crore of foreign currency borrowing and Rs 400 crore bonds issued in early 1990. Bureau Report