Bangalore: State Bank of India (SBI) has announced that it will cut its prime lending rate (PLR) by 50 basis points (bps) to 11.75 percent from 12.25 percent that will be effective from June 29. SBI had earlier cut its term deposit rates by 25 basis points across all maturities with effect from June 15. The latest action by India's largest bank is expected to encourage other public sector banks also to pare their lending rates. After the Finance Minister's directive to banks on June 10 to reduce the PLRs, only SBI and Union Bank of India have reduced the rates. Union Bank of India had announced a 25 bps reduction in the PLR to 11.75 percent, with effect from July 1. Other banks like IDBI and Bank of India are yet to cut their rates. The PLR is the rate at which a bank lends to its most creditworthy customers and according to a SBI official around 60 percent of the bank's loan portfolio will be impacted by this cut. All loans including home loans, which are linked to PLR, will benefit from the latest rate cut. With Indian firms borrowing below PLR from banks, SBI's corporate customers too would gain from the rate cut.