Following the country's apex bank reducing the repo rate by 50 basis points, major banks across the country have reduced their lending rates with Andhra Bank taking the lead.
Effective from September 29, the Hyderabad-based bank cut its base rate by 25 basis points to 9.75 percent. This was followed by the country's largest mortgage lender State Bank of India lowering its base rate by 40 basis points to 9.3 percent.
Bank of Baroda, Punjab National Bank, Axis Bank and UCO Bank joined the league of banks lowering the minimum interest rate on loans on Wednesday.
New Delhi-based Punjab National Bank took a call to reduce the base rate by 40 basis points taking the figure to 9.6 percent while another public sector undertaking UCO Bank reduced its base rate by 25 basis points to 9.7 percent.
Effective from October 5, Bank of Baroda will also reduce the base rate by 25 basis points from the prevalent 9.90 percent to 9.65 percent while the Oriental Bank of Commerce announced rate reduction by 20 basis points to 9.7 percent.
In the private sector, Axis Bank pioneered the recent rate cut, revising its base rate by 35 basis points from 9.85 percent to 9.50 percent.
ICICI Bank -- India's largest private sector bank -- and HDFC Bank, however, are yet to decide on a possible rate cut. Presently, their base rates stand, respectively, at 9.7 percent and 9.35 percent.
The Reserve Bank of India on Tuesday reduced the repo rate or the interest charged on short-term borrowings by 50 basis points to 6.75 percent, with the aim to boost the sluggish loans' scenario pan-India.
The indexed reverse repo rate, or the interest payable by the central bank on short-term deposit, automatically stood reduced to 5.75 percent.
There were no cuts, however, in the four percent cash reserve ratio that banks have to maintain in the form of liquid assets and designated government securities.
