The State Bank of India on Tuesday reduced its base rate by 15 basis points. The move follows the RBI repo rate cut by 25 basis points. The base rate or minimum lending rate will be now 9.70%.
After the last policy meet on April 7, SBI took other banks by surprise when it cut base rate by 15 bps to 9.85 per cent.
RBI Governor Raghuram Rajan on Tuesday also urged banks to pass through the sequence of rate cuts into lending rates. Despite two repo rate cuts by RBI, very few banks have passed on the benefits to customers.
Welcoming the “timely repo rate cut” by the Reserve Bank, State Bank chairperson Arundhati Bhattacharya said she “anticipates the rate cut will transmit through the banking system sooner than later”.
Meanwhile, mid-sized state-owned Allahabad Bank also cut its base rate by 0.3 per cent. The base rate has been reduced to 9.95 per cent from 10.25 per cent. The Punjab & Sind Bank also cut their base rate by 0.25 per cent.
Other banks are also likely to follow suit.