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Mumbai based public sector lender Bank of India today decided to cut its base rate by 25 basis points to 10%. New rate would be effective from July 8, the bank said in a statement to exchanges.
Earlier in the morning today finance minister P Chidambaram had met chief of public sector banks for a review meeting.
Chidambaram had asked banks to cut the interest rates for borrowers apart from reviewing bad loans of the banks.
Bank of India has become the first bank to reduce the rates after Chidambaram’s appeal.
The banks hadn’t cut the lending rates in proportion with Reserve Bank of India’s reduction in policy rates citing high deposit rates.
RBI had reduced repo rate by 75 basis points to 7.25% and cash reserve ratio (CRR) by 25 basis points to 4% in 2013. The banks have however cut the lending rates in selective brackets.
Amongst the public sector lenders, State Bank of India has lowest base rate of 9.7% in the country while in private lenders HDFC Bank has the lowest base rate at 9.6%.
