Following the cut in repo and cash reserve ratio (CRR) by the Reserve Bank of India (RBI), two more large public sector lenders pared their base rates by 25 basis points (bps).
Punjab National Bank (PNB), the third largest public sector lender, announced a cut in base rate by 25 bps to 10.25 per cent. Union Bank of India also announced the same while declaring their quarterly results in Delhi and Mumbai.
“There is a need for monetary transmission. So, we have reduced the base rate. This would provide a much-anticipated relief to borrowers having floating rate advances linked to the base rate,” PNB chairman and managing director K R Kamath told reporters.
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“We have decided to cut the base rate by 25 bps effective from February 9. Deposit rates have not been changed as of now,” said D Sarkar, chairman and managing director, Union Bank of India.
Central Bank of India may announce a cut in interest rates tomorrow.
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Yesterday, State Bank of India reduced its base rate by five bps to 9.7 per cent bringing it at par with HDFC Bank, which had the lowest base rate in the sector. HDFC Bank, however, went for a cut in the automobile segment by 25-50 bps.
The largest private sector lender, ICICI Bank, is yet to take a call.
“We haven’t taken a view on a rate cut yet,” said Chanda Kochhar, managing director and CEO, in a call with reporters after announcing the bank’s quarterly performance. “There would be a positive impact on EMIs,” she had said after RBI announced the cut in repo rate and CRR.
RBI had on Tuesday, while announcing third quarterly review of monetary policy, cut the repo and CRR by 25 bps each, bringing them down to 7.75 per cent and 4 per cent, respectively. RBI had cut the repo for the first time since April 2011.