Following cut in repo and cash reserve ratio by the Reserve Bank of India two more large public sector lenders pared their base rates by 25 basis points (bps).
Third largest public sector lender Punjab National Bank (PNB) announced the cut in base rate by 25 bps to 10.25% while also another large public sector Union Bank of India also announced the same while declaring their quarterly results in Delhi and Mumbai.
“There is a need for monetary transmission to happen. So we have reduced the base rate. This would provide a much anticipated relief to borrowers having floating rate advances linked to base rate,” PNB chairman and managing director KR Kamath told reporters.
“We have decided to cut the base rate by 25 bps effective from 9 February while deposit rates have been not changed as of now” said D Sarkar, chairman and managing director Union Bank of India.
Another public sector lender Central Bank of India is likely to announce the cut in interest rates tomorrow.
Yesterday country’s largest lender State Bank of India reduced its base rate by 5 bps to 9.7 bringing it with at par with HDFC Bank which had the lowest base rate in the industry. HDFC Bank however went for a cut in the auto segment by 25-50 bps.
Country’s largest private sector lender ICICI Bank is yet to take the call on rates. “We haven’t taken a view on rate cut yet” said Chanda Kochhar, managing director and CEO of ICICI Bank in the call with the reporters post announcing the bank’s quarterly performance. “There would be positive impact on EMIs” she had said after RBI announced the cut in repo rate and cash reserve ratio (CRR).
RBI on Tuesday while announcing third quarterly review of monetary policy had cut the repo and CRR by 25 bps bringing them down to 7.75% and 4% respectively. RBI had cut the repo for the first time after April 2012.
