Banks lower interest rates taking cues from RBI policy
April 19th, 2012 - 9:00 pm ICT by IANSMumbai, April 19 (IANS) Leading lenders including ICICI Bank and Punjab National Bank Thursday announced cut in both lending and deposit rates, just two days after the Reserve Bank of India lowered key policy rates.
The move will make housing, auto and other loans cheaper.
Punjab National Bank, the country’s second largest public sector lender, said it will cut the annual benchmark prime lending rate by 0.25 percent to 14 percent, effective from May 1.
The bank has also decided to lower the base rate, the rate below which it can’t lend, by 0.25 percent to 10.50 percent.
PNB will decrease the interest rate on term deposits of less than Rs.1 crore by 0.25 percent to 0.50 percent in select duration periods, the bank said in a statement.
All the changes in rates by PNB will be effective from May 1.
India’s largest private sector lender ICICI Bank said it will lower base rate and deposit rates by 0.25 percent effective from April 23.
It also announced 0.25 percent cut in its benchmark prime lending rate and its floating reference rate for consumer loans, including home loans.
“With the easing of systemic liquidity, we have already seen some correction in wholesale deposit rates. We expect the cost of funds to gradually come down and this reduction in the lending rates is a proactive move by us to pass on the benefit to our valued customers,” ICICI Bank managing director and chief executive officer Chanda Kochhar said in a statement.
ICICI Bank also announced a decrease in interest rates for various tenors of retail fixed deposits by 0.25 percent with effect from April 23.
The RBI in its annual monetary policy for 2012-13 announced on April 17, cut key policy rates by 0.50 percent. This is the first rate cut by the central bank in three years.
In order to provide additional liquidity cushion to the banking system, the RBI has enhanced the borrowing limit for banks under the marginal standing facility to 2 percent of net demand and time liabilities.
IDBI Bank had Wednesday announced 0.25 percent cut in lending and deposit rates.
- SBI, Allahabad Bank cut interest rates - Apr 23, 2012
- ICICI Bank hikes lending, deposit rates - Dec 04, 2010
- SBI lowers deposit rates by 0.25 percent - Jun 07, 2012
- PNB, Allahabad Bank hike lending, deposit rates - Jul 29, 2011
- SBI to hike lending rates, loans get dearer - Apr 19, 2011
- Rs.17,000 crore released into banking system; retail interest rates expected to fall (Roundup) - Sep 17, 2012
- Interest rates to go down but not immediately, say top banks - Apr 17, 2012
- Inflation, fiscal deficit leave little room for rate cut - Jul 29, 2012
- Sensex jumps 304 points ahead of RBI policy review (Lead) - Jul 30, 2012
- SBI raises lending, deposit rates; loans to get costlier - Aug 16, 2010
- RBI hikes key rates by 0.25 percent to curb inflation - Jan 25, 2011
- Rate hike fears weigh Sensex, broader markets lacklustre - Jul 25, 2011
- RBI may cut key lending rates by 25 basis points - Apr 16, 2012
- Inflation forces India's central bank to hike rates again (Roundup) - May 03, 2011
- RBI cuts SLR by 1 percent - Jul 31, 2012
Tags: bank of india, banking system, chief executive officer, consumer loans, crore, cues, fixed deposits, home loans, icici bank, liquidity, managing director, monetary policy, pnb, prime lending rate, proactive move, punjab national bank, reserve bank of india, rs 1, tenors, term deposits