SBI cuts base rate, three others follow

India’s largest lender State Bank of India (SBI), on Tuesday took the lead in lowering its base rate by 15 basis points (bps) to 9.70 per cent soon after Reserve Bank of India (RBI) Governor Raghuram Rajan nudged banks to do so while announcing the monetary policy.

Among other banks, Allahabad Bank reduced lending rates by 30 bps to 9.95 per cent, Dena Bank and Punjab & Sind Bank followed with a 25 bps cut to 10 per cent each with effect from Wednesday.

While announcing the monetary policy statement, RBI Governor Raghuram Rajan stated that banks must consider passing on the three rate cuts which the central bank has made since January 2015.

Prior to this, SBI had announced a 15 bps rate cut in April this year, along with base rate cuts by private sector lenders such as ICICI Bank and HDFC Bank. Apart from a base rate cut, SBI had also lowered the interest rate on home loans by up to 25 bps in April.