By Accommodation Times News Services
ICICI Bank one of the leading privates bank in the country have reduced their base rates by 5 points to 9.7 per cent, to match its biggest rivals, State Bank of India (SBI) and HDFC Bank. Loan demand, particularly from the corporate sector, has been sluggish amid a slowing economy while home and automobile loans are the only segments where banks are pushing.
On June 2, the Reserve Bank of India (RBI) reduced the key policy rate or the repo rate by 25 bps to 7.25 per cent.SBI immediately responded by reducing its base rate by 15 bps to 9.70 per cent, leaving behind ICICI Bank and HDFC Bank. In April, ICICI Bank reduced its base rate by 25 bps to 10.75 per cent, while SBI reduced it by 15 bps to 9.85 per cent.
HDFC Bank’s rate action was similar to SBI, which reduced its base rate by 15 bps in April and another 15 bps in June.
However, banks’ have only partially responded to RBI’s policy rate reduction. Since January, RBI has lowered the repo rate by 75 bps, while banks’ base rate cuts have been 25-30 bps only.