New Delhi: Following the short term lending rate (repo) cut by RBI by 0.5 percent to 8 percent in its monetary policy on April 17, banks have started cutting lending rates making various loans cheaper. First lending rate cut by 25 bps was announced by IDBI Bank on Wednesday.

Country's second largest public sector bank PNB on Thursday announced cut in lending rate by 0.25 percent, a move that will make housing and corporate loans cheaper.
   
"The bank has decided to decrease the base rate by 25 basis points from 10.75 percent to 10.50 percent," Punjab National Bank said in a statement. The base rate is the minimum interest rate below which banks can't lend.
   
With the reduction in rates, likely to be followed by other lenders, housing and corporate loans would become cheaper by at least 0.25 percent.
   
Besides, PNB has also decided to slash interest rate on term deposits of less than Rs 1 crore by 0.25-0.50 percent in select buckets.
   
The new rates will be effective from May 1, the bank said.
   
Afterwards, the country's largest private sector lender ICICI Bank also 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.

New Delhi: Following the short term lending rate (repo) cut by RBI by 0.5 percent to 8 percent in its monetary policy on April 17, Banks have started cutting lending rates making various loans cheaper. First lending rate cut by 25 bps was announced by IDBI Bank on Wednesday. Private sector major ICICI Bank has also announced 0.25 percent lending rate cut on Thursday.

Country's second largest public sector bank PNB on Thursday announced cut in lending rate by 0.25 percent, a move that will make housing and corporate loans cheaper.
   
"The bank has decided to decrease the base rate by 25 basis points from 10.75 percent to 10.50 percent," Punjab National Bank said in a statement. The base rate is the minimum interest rate below which banks can't lend.
   
With the reduction in rates, likely to be followed by other lenders, housing and corporate loans would become cheaper by at least 0.25 percent.
   
Besides, PNB has also decided to slash interest rate on term deposits of less than Rs 1 crore by 0.25-0.50 percent in select buckets.
   
The new rates will be effective from May 1, the bank said.
   
Afterwards, the country's largest private sector lender ICICI Bank also 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.



(JPN/Agencies)