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IDBI Bank cuts base rate by 0.25% to 9.75%

IDBI Bank cuts base rate by 0.25% to 9.75%

Earlier in the day, Bank of Baroda and Axis Bank had also reduced their base rates. Besides, Punjab National Bank (PNB) cut its base rate by 0.40 per cent to 9.60 per cent, effective from October 1.

Following other lenders, state-run IDBI Bank on Wednesday cut its base rate by 0.25 per cent to 9.75 per cent, a day after the Reserve Bank slashed its key repo rate by 50 basis points.

The new base rate will be effective from October 5. The reduction in interest rate is expected to positively encourage loan growth, both in the retail consumer segment, as also revitalise fixed capital formation through higher corporate sector lending, thereby supporting the growth impulses in the economy, the bank said in a statement.

In the fourth bi-monthly monetary policy review on Tuesday, Governor Raghuram Rajan cut repo rate by 0.50 per cent , leading to a rush of base rate revisions by banks, led by State Bank of India .

Earlier in the day, Bank of Baroda and Axis Bank had also reduced their base rates. Besides, Punjab National Bank (PNB) cut its base rate by 0.40 per cent to 9.60 per cent, effective from October 1. Oriental Bank of Commerce (OBC) slashed its base rate by 0.20 per cent to 9.70 percent, with effect from September 30.

Axis Bank reduced its base rate by 0.35 per cent to 9.50 per cent, while Bank of Baroda cut its minimum lending rates by 25 basis points to 9.65 per cent.

The new rates of both the banks will be applicable from October 5. Banks have started reducing their base rates after the RBI, in a surprise move, reduced repo rate by 50 basis points to 6.75 per cent from 7.25 per cent.

Country's largest lender State Bank of India on Tuesday cut its base rate by 40 basis points to 9.30 per cent from 9.70 per cent.

A few state-run lenders such as Bank of India and Andhra Bank had also reduced their base rates by 0.25 per cent to 9.70 per cent and 9.75 per cent, respectively. IDBI Bank has also reduced the retail term deposit rates in select buckets by 25-50 basis points with effect from October 5.