Joining the rate-cut bandwagon, two state-owned lenders Canara Bank and Oriental Bank of Commerce today cut base rates to 10 per cent, which will lead to lower EMIs for their loan consumers.
"The bank has reduced the base rate or minimum lending by 0.20 per cent to 10 per cent for loans and advances with effect from May 11," Canara Bank said in a statement.
Similarly, OBC revised downward its base rate to 10 per cent from 10.25 per cent, effective May 15.
All loans linked to base rates will now become cheaper, accordingly.
OBC further said in a statement that it has reduced interest rate on fixed deposit by up to 0.25 per cent on select maturities.
During the week, many banks including Punjab National Bank, Bank of Baroda, and IDBI Bank reduced base rate by 0.25 per cent to 10 per cent.
The country's largest lender, SBI, had reduced its base rate by 0.15 per cent to 9.85 per cent, effective April 10.
Banks such as SBI, ICICI Bank, HDFC Bank and Axis Bank had cut lending rates by up to 0.25 per cent after RBI Governor Raghuram Rajan's tough talk with bankers on April 7.
The Reserve Bank had blamed banks for not passing the benefits of two repo rate cuts to borrowers and termed as "nonsense" the lenders' claims that cost of funds is high.
"The banks' marginal cost of funding (has) fallen, the notion that it hasn't fallen, is non-sense. It has fallen," Rajan had said.
