Kotak Mahindra Bank on Wednesday cut its base rate by 10 basis points to 9.75%.
In a filing to the Bombay Stock Exchange, the bank said the new rate will be effective from Thursday. With this cut, the lender edged closer to the lowest base rate provided by an Indian bank, which is currently 9.7% offered by State Bank of India, ICICI Bank and HDFC Bank.
Some of the banks that recently revised their base rates are ICICI Bank, Axis Bank and Lakshmi Vilas Bank. Lenders started a string of base rate cuts in April after the Reserve Bank of India expressed concern over the lack of transmission of rate cuts by banks. The apex bank has trimmed the repo rate thrice this calendar year by a total of 75 basis points to 7.25%.
Moreover, with non-food credit growth remaining low due to a sluggish investment growth and stiff competition from the corporate bond market, cutting base rates could be seen as a step towards attracting more business.