State Bank of Mysore (SBM), an associate bank of SBI, today cut its base rate of minimum lending rate by 0.25 per cent to 10 per cent, a move that would lower the EMIs for its customers.
The bank has revised downward the base rate from 10.25 per cent to 10 per cent effective from May 1, SBM said in a statement.
This is the largest quantum of rate cut announced by any bank so far after RBI left policy rate unchanged in its first bi-monthly monetary policy on April 7.
Following the base rate cut, all the loans linked to base rate would at least come down by 0.25 per cent.
SBI, the parent bank, reduced its base rate by 0.15 per cent to 9.85 per cent effective April 10.
The Benchmark Prime Lending continues to be at the same level of 15 per cent, it said.
Banks such as SBI, ICICI Bank, HDFC Bank and Axis Bank also cut lending rate by up to 0.25 per cent after RBI Governor Raghuram Rajan's tough talk with bankers on the issue. However, many others did not revise their rates.
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 fund was high.
"The banks marginal cost of funding (has) fallen, the notion that it hasn't fallen, is nonsense. It has fallen" RBI Governor Raghuram Rajan had said.
