Banks to cut interest rates

By Accommodation Times News Service

A day after the Reserve Bank of India (RBI) cuts its key policy rates, country’s largest lenders like State Bank of India (SBI); HDFC has cut its lending rate. After this marginal reduction, SBI base rate or the minimum rate of lending will come down to 9.70% from 9.75% effective February 4. SBI which is one of the most aggressive offerings among domestic banks had been last cut its rate by 0.025%. One of the official said, through reduction we are passing on a little more than what we gain through the rate cut by the Reserve Bank. The old benchmark prime lending rate will also go down by a similar 0.05%, the bank has not cut deposit rates as the Asset’s Liability Committee (ALCO) felt its offering is among the lowest in the market at present.

The Reserve Bank yesterday cut its short-term lending rate by 0.25% and also reduced the CRR by a similar amount to ease the strained liquidity conditions.





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