Mumbai : Largest private sector lender ICICI Bank marginally reduced its base rate to 9.70 per cent from 9.75 per cent earlier, making its lending rate at par with industry leader SBI and that of HDFC Bank.
In April, it had slashed base rate by 0.25 per cent to 9.75 per cent. SBI was the first of the block to reduce its base rate earlier this month after RBI Governor Raghuram Rajan in the June 2 monetary policy statement urged banks to pass through the sequence of rate cuts into lending rates. SBI had reduced its base rate by 15 basis points to 9.70 per cent. The second largest private sector lender HDFC Bank followed suit last week by slashing its base rate by 0.15 per cent to 9.70 per cent.
Meawhile, another private sector lender Kotak Mahindra Bank also hinted at a base rate cut.
On Thursday, State Bank of India also cut interest rates on some bulk deposits of 10 mln rupees and above by 25-75 basis points, data on the bank’s website showed. The rate cuts will come into effect on Friday. Most banks have been reducing deposit rates amid tepid loan demand and comfortable liquidity in the banking system. Banks have also been reducing deposit rates to ensure it creates space for them to lower loan rates without taking a hit on their net interest margins. The Reserve Bank of India, which has cut the repo rate by a total of 75 basis points in 2015, is prodding banks to fully transmit its policy rate cuts.
