Private sector lender ICICI Bank on Thursday reduced its base rate by 35 basis points to 9.35%, which will be effective October 5.
The move came even as Dena Bank, Allahabad Bank, SBBJ, YES Bank, Kotak Mahindra Bank, Syndicate Bank and Karnataka Bank also trimmed their base rates by 25/30 basis points in the wake of the Reserve Bank of India’s surprise repo rate cut by 50 bps in Tuesday’s credit policy.
Kotak Mahindra Bank on Thursday reduced its base rate from 9.75% to 9.50% with effect from October 5 according to the bank’s filing on the BSE. All categories of loans (other than the exceptions permitted by the RBI) will be priced with reference to the revised base rate, it added.
Dena Bank also reduced its base rate by 30 bps to 9.7% from 10% with the new rate being applicable from October 5. “Almost 80% of our advances are linked to base rate so there would be an impact of 20-25 bps on our margins,” executive director RK Takkar said.
Yes Bank has also trimmed its base rate by 25 bps to 10.25% with the revised rate being effective October 5. Syndicate Bank said its base rate has been revised from 10% to 9.7%, effective October 1, while Karnataka Bank slashed its rate by 25 bps to 10.25%, effective October 5.
SBI associate State Bank of Bikaner & Jaipur (SBBJ) also reduced its base rate to 9.7% from the existing rate of 9.95% while Allahabad Bank slashed its base rate by 25 bps to 9.7%.
Other banks that have so far cut rates include SBI, PNB, Bank of Baroda, Bank of India, Andhra Bank, IDBI Bank, Axis Bank and Oriental Bank of Commerce. As of now, the country’s largest lender SBI has the lowest base rate in the banking system at 9.30%.
The RBI has been pushing for a better transmission of rate cuts through the banking system. So far, the central bank has cut the repo rate by a total of 125 basis points in the calendar year 2015.