Bank of Maharashtra cuts minimum lending rate to 10.25%

First bank to cut lending rates after RBI governor's comments

State-run Bank of Maharashtra today announced a cut of 0.15 percentage point in its minimum lending rate or base rate to 10.25%, a move which will make its housing and auto loan cheaper.

"The bank has decided to revise the bank's base rate from 10.40% per annum to 10.25% per annum with effect from December 15, 2014," Bank of Maharashtra (BoM) said in a filing to the BSE.

BoM is the first bank that has lowered lending rates after RBI Governor Raghuram Rajan made a case for lowering lending rates by banks earlier this month.

"Some easing of monetary conditions has already taken place... However, these interest rate impulses have yet to be transmitted by banks into lower lending rates," Rajan had said during the monetary policy review.

Helped by softening prices of food items, retail or consumer price index (CPI) based inflation declined to 5.52% in October.

While, wholesale price index (WPI) based inflation fell to 1.77% during the month.

Shares of Bank of Maharashtra were trading at Rs 43.20 per piece on the BSE, up 1.29% from previous close.