The country's largest private sector lender
ICICI Bank on Thursday cut its lending and deposit rates by 0.25 per cent following the
Reserve Bank cutting interest rates by 0.50 per cent two days ago.
Accordingly, the bank's base rate, or the minimum rate of lending, stands reduced by 25 basis points to 9.75 per cent, while the prime lending rates also saw a similar reduction to 18.50 per cent.
"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," Managing Director and Chief Executive
Chanda Kochhar said in a statement, explaining the reason for the reductions.
The revised base rate is applicable from April 23, the bank said.
The country's second largest public sector bank Punjab National Bank
(PNB) also on Thursday announced cut in lending rate by 0.25 per cent, a move that will make housing and corporate loans cheaper.
"The bank has decided to decrease the base rate by 25 basis points from 10.75 per cent to 10.50 per cent," Punjab National Bank said in a statement. The base rate is the minimum interest rate below which banks can't lend.
With the reduction in rates, likely to be followed by other lenders, housing and corporate loans would become cheaper by at least 0.25 per cent.
Besides, PNB has also decided to slash interest rate on term deposits of less than Rs 1 crore by 0.25-0.50 per cent in select buckets.
The new rates will be effective from May 1, the bank said.
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