Bank of India cuts base rate by 0.25 %

July 03, 2013 05:46 pm | Updated November 16, 2021 09:01 pm IST - New Delhi

New Delhi : Union Finance Minister P Chidambaram at an interaction with PTI in New Delhi on Monday. PTI Photo by Subhav Shukla (PTI7_1_2013_000098A)

New Delhi : Union Finance Minister P Chidambaram at an interaction with PTI in New Delhi on Monday. PTI Photo by Subhav Shukla (PTI7_1_2013_000098A)

Hours after Finance Minister P Chidambaram prodded public sector banks to reduce lending rates, Bank of India on Wednesday announced a cut of 0.25 per cent in base rate to 10 per cent.

The bank has decided to reduce its base rate from the existing 10.25 per cent to 10 per cent, Bank of India (BoI) said in a statement.

The new rate would be effective from July 8, it said.

Base rate is the minimum lending rate below which a bank cannot give loan to any borrower.

Earlier in the day, Finance Minister P Chidambaram after meeting the heads of public sector lenders said he has advised the banks to reduce lending rates to stimulate credit growth.

“We have advised banks to take a look at the base rate. The base rate of SBI is 9.7 per cent. The average of the base rate of other banks is 10.2 or 10.25. We have asked them to take a look at the base rate,” he said.

“I have impressed upon the bankers that the Reserve Bank of India has cut the policy rates by 125 basis points, and some part of this must indeed be passed on to borrowers,” he said.

“Cost of money has also gone up by 40 or 50 basis points, making it difficult to pass on rate cut to consumers. Nevertheless, all of them assured me that during the month of July, they will review their base rates and will take appropriate decision on cutting the base rate,” he said.

Mr. Chidambaram further added that the reduction in base rate would be a powerful booster to the economy and a powerful stimulus to credit growth.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.