Mumbai: The country's largest private sector lender ICICI Bank on Thursday became the first major bank to cut its lending and deposit rates by 0.25 percent following the Reserve Bank cutting interest rates by 0.50 percent two days ago.
Accordingly, the bank's base rate or the minimum rate of lending, stands reduced by 25 basis points to 9.75 percent, while the prime lending rates also saw a similar reduction to 18.50 percent.
"With the easing of systemic liquidity, we have already seen some correction in wholesale deposit rates. We expect the cost of funds to gradually come down and this reduction in the lending rates is a proactive move by us to pass on the benefit to our valued customers," Managing Director and Chief Executive Chanda Kochhar said in a statement explaining the reason for the reductions.
The revised base rate is applicable from April 23, the bank said. The move comes a day after state-run mid-run bank IDBI Bank announced a 0.25 percent cut in lending rates while a slew of other banks, including HDFC Bank, have also hinted at similar moves since the RBI announcement.
The ICICI has also cut rates on loans under the older BPLR (benchmark prime lending rate) regime by 0.25 percent to 18.50 and for consumer loans, apart from cutting its floating reference rate (FRR) by a similar amount to 15.50 percent which will benefit home loan borrowers.
The move by ICICI Bank comes within two days of RBI cutting its key lending rate by a surprising 0.50 percent to 8 percent with a view to boost sagging growth.