In line with its industry peers, Bank of Baroda (BoB) and Syndicate Bank have cut lending rates across the board. BoB and Syndicate Bank have both reduced their base rates and benchmark prime lending rates (bplr) by 25 bps to 10.50% and 14.75%, respectively.
BoB has also reduced its deposit rates by 25 to 50 bps across various maturities. MD Mallya, CMD, Bank of Baroda said, ?We have reduced the base rates in line with the RBI monetary stance and have passed on the benefits to the customers”.
He added that the rate cut could have some impact on the margins. However, the bank believes with the economy improving and the inflation coming down, there could be change with the asset liability favoring us.
Mallya added that BoB would continue to focus on its retail portfolio and current account savings account (CASA) deposits to tide over any strains on the margins.
Syndicate Bank has also revised its interest rates on domestic term deposits up to R15 lakhs under select maturity buckets along with some revision in interest rates on NRE term deposits.
Punjab National Bank, the second largest lender in the country, and ICICI Bank, the largest private sector lender, earlier on Thursday reduced their base rates by 25 bps each to 10.50% and 9.75 %, respectively. The other banks which have reduced their base rates soon after the Reserve Bank of India cuts it repo rates by 50 bps are IDBI Bank and Bank of Maharashtra.
The RBI?s infusion of liquidity through 125 basis points cut in CRR to 4.75%, which resulted in a liquidity infusion of R80,000 crore, has helped bring down wholesale borrowing rates.
Further, RBI has enhanced the borrowing limit for banks under the Marginal Standing Facility to 2% of net demand & time liabilities (NDTL) and the rate at which banks can borrow is now 9%. Most public sector banks have a high base rate; Bank of India and Canara Bank have a base rate of 10.75%. HDFC Bank and State Bank of India have a base rate of 10%.