Bank of Maharashtra on Thursday cut base rate by 15 basis points to 10.25%. The Pune-based lender is the second bank to cut the lending rate. Axis Bank had pared its base rate by 10 bps in October to 10.15%.
Amid a broadbased slowdown in credit growth and a downward trend in deposit rates, banks having high base rates are paring them to attract companies to borrow. Bank of Maharashtra’s base rate was one of the highest among banks. Most PSB base rates are around 10.25% while the base rates of the top three lenders — SBI, HDFC Bank and ICICI Bank — is at a competitive level of 10%.
HDFC Bank CEO, Aditya Puri had said recently that most banks will cut lending rates in early 2015 as the credit growth in the system remains dysmal around 11%. SBI’s credit growth as of November was 10%, according to chairman Arundhati Bhattacharya.