Loans to get cheaper, SBI, HDFC, Federal Bank cut lending rates
While the SBI has reduced the lending rate by a marginal 0.05 per cent, private sector HDFC Bank and Federal Bank announced reduction in a few segments like auto loans to the tune of 0.25-0.50 per cent.
Yesterday, public sector IDBI Bank and Royal Bank of Scotland (RBS) had reduced lending rates by 0.25 per cent and 0.75 per cent respectively.
The lowering of the interest rates follows the decision of the RBI to cut key benchmark lending (repo) rate by 0.25 per cent and deciding to inject additional liquidity of Rs 18,000 crore by a similar cut in Cash Reserve Ratio (CRR).
With the reduction, SBI's base rate or the minimum lending rate will now go down to 9.70 per cent from 9.75 per cent effective February 4.
"Through this reduction, we are passing on a little more than what we gain through the rate cut by the RBI," a senior SBI official said after a meeting of the asset liability committee of the bank.
HDFC Bank has lowered interest rate on car and two-wheeler loans by 0.25 per cent and 0.5 per cent respectively.
On commercial vehicles, the interest rates would be reduced by 0.25 per cent, a official said adding that the new rates would be effective from February 1. Mumbai-based HDFC Bank
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