OBC cuts lending, deposit rates by up to 50 bps

New lending rate will be effective from tomorrow, fixed deposit rates from April 16

State-owned Oriental Bank of Commerce (OBC) today slashed base rate or minimum lending rate by a marginal 10 basis points (bps) while fixed deposit rates on select maturities by up to 50 bps.

The bank has reduced the base rate by 10 basis points to 10.65% from 10.75%, OBC said in a statement.

The reduction in base rate will make all kind of loans, including housing, auto loans cheaper by at least 10 bps.

The new rate would be effective from tomorrow, it said.

As far as deposit rates are concerned, the bank reduced interest rate on fixed deposits with maturity between 1-2 years by 25 bps to 9.50%.

For term deposits worth Rs 15 lakh to Rs 1 crore with maturity between 46-90 days, the new interest rate will be 50 bps lower than the existing 9%.

Further the bank has increased its rate of interest applicable for senior citizens from 50 bps to 60 bps over and above the card rate.

The new fixed deposit rates would be effective from April 16.

Interestingly, some of the large public sector banks like Bank of Baroda, Bank of India raised their deposit rates upwards last month.

Increased in the fixed deposit rates by these banks was due to tight liquidity situation.

To improve liquidity in the system, RBI in March had reduced the cash reserve ratio (CRR)-- the portion of deposits banks require to keep with the central bank -- from 5.5% to 4.75%.

With the reduction, the central bank pumped in Rs 48,000 crore in the economy.