State lenders PNB, BoB, OBC cut base rate up to 0.40%

Bank of Baroda has decided to reduce base rate by 25 basis points effective from Oct 5

State-run lenders Punjab National Bank, Bank of Baroda and Oriental Bank of Commerce have trimmed their base or minimum lending rates up to 0.40% in response to RBI's policy rate cut.

Punjab National Bank (PNB) cut the base rate by 0.40%, Bank of Baroda (BoB) by 0.25%, while Oriental Bank of Commerce (OBC) slashed the rate by 0.20%.

"Base rate cut by 40 bps from 10% to 9.60% from October 1," PNB said in a statement.

In a BSE filing BoB said it has decided "to reduce base rate by 25 basis points from 9.90% per annum to 9.65%."

It also reduced the Benchmark Prime Lending Rate (BPLR) by 25 basis points (or 0.25%) from 14.15% to 13.90%.

The reduction in both the rates will be effective from October 5, the lender added.

"Oriental Bank of Commerce has slashed its base rate by 20 basis points from 9.90% per annum to 9.70% with effect from September 30, 2015," it said in a filing.

Earlier today, Axis Bank -- first among private lenders after RBI's policy announcement yesterday -- announced a cut of 0.35% in base rate to 9.50%.

The base rate is the minimum rate of interest at which a bank can lend to its borrowers.

Country's largest lender State Bank of India, Andhra Bank and Bank of India were among the first to cut base rate yesterday in the range of 0.20-0.40% in response to RBI's repo rate cut of 50 basis points to 6.75%.

While the base rate cut so far has come mostly from public sector lenders except Axis Bank, other private peers are expected to follow suit soon.

Soon after the RBI announcement, Finance Minister Arun Jaitley yesterday expressed hope that banks will transmit the benefit to borrowers to boost investments and the economy.

"We are looking forward now to the transmission of these cuts which will effectively help to boost confidence and investment. They will also help to realise the economy's medium term potential growth rate," Jaitley had said.