"We have not taken any decision on the interest rate...," IDBI chairman SH Khan said, adding that the institution had effected a half a percentage cut in its PLR in April.

The IDBI board met in Mumbai on Friday to finalise the audited accounts for fiscal year 1998. According to sources, the board deliberated on the interest rate cut and decided to wait and watch till the presentation of the annual budget.

On being asked whether he is ruling out a PLR cut, Khan said: "All I am saying is that we are not considering a PLR cut at this point of time."A string of commercial banks led by the State Bank of India have cut their PLR responding to the RBI's signal in the credit policy that interest rates must come down. "Interest rates are unlikelyto go up this fiscal. The movement of the rates will not depend on the government's market borrowing programme but on the demand for credit. If credit picks up substantially, there could be pressure on the lending rates. In that case, rates may go up," Khan said.

Both IDBI and Industrial Finance Corporation of India (IFCI) in April cut their PLR by half a percentage point. IDBI pared its minimum-term lending rate (MTLR) by half a percentage point to 14 per cent (exclusive of interest tax). The minimum short-term lending rate (MSTLR) was also cut by a similar margin -- from 13.5 per cent to 13 per cent.

The Industrial Credit & Investment Corporation India (ICICI) slashed its long-term prime rate (LTPR) to 14 per cent while both short-term prime rate (STPR) and medium-term prime rate (MTPR) were fixed at 13.5 per cent.