Bank Of Baroda cuts base rate by 0.25% to 10 per cent

Mumbai

Following peers, public sector Bank of Baroda today slashed base rate or minimum lending rate by 0.25 per cent to 10 per cent.

The cut in base rate will benefit consumers as it will make auto, home and other loans cheaper.

“Bank of Baroda has informed the BSE that the bank has decided to reduce base rate by 25 basis points (0.25 per cent) from 10.25 per cent to 10 per cent with effect from May 6, 2015,” it said in a regulatory filing.

Leading banks including the market leader State Bank of India (SBI) and private sector lenders like ICICI Bank and HDFC Bank have already announced a cut in the lending rates by 0.15 to 0.25 per cent following RBI Governor Raghuram Rajan’s tough talk in April’s first Monetary Policy review for 2014-15.

The RBI had reduced the policy rate by 0.5 per cent in two tranches of 0.25 per cent each in January and March. Both the rate cuts by RBI were out of its monetary policy ambit.

Referring to the reluctance of the banks to pass on the rate cut to the borrowers, Rajan termed as “nonsense” the lenders claim that cost of fund was still high.

“The banks marginal cost of funding (has) fallen, the notion that it hasn’t fallen, is nonsense; it has fallen!” Rajan said on April 7 triggering reduction of lending rate by borrowers.

PTI