State Bank of Mysore cuts lending rate by 0.25%

State Bank of Mysore (SBM), a subsidiary of SBI has decided to reduce lending rate by 0.25% effective tomorrow.

The base rate has been reduced to 10.25% from 10.50%, State Bank of Mysore said in a statement.

Base rate is the minimum lending rate below which a bank cannot lend.

Loans linked to base rate of the bank will become cheaper by at least 0.25%.

Last month, SBI slashed lending rate by 0.25% to to 9.75%, the lowest base rate in the banking sector.

The decision by the country's largest bank comes a day after the Reserve Bank cut CRR by 0.25% to 4.5% injecting Rs 17,000 crore into the system.

SBI also reduced the benchmark prime lending rate (BPLR) by 0.25% to 14.50% last week. The rate cut would benefit those who availed of loans before July, 2010.

The base rate mechanism came into effect in July 2010 as a new transparent alternative to the earlier benchmark prime lending rate.