Largest private sector lender ICICI Bank on 19 April 2012 slashed its lending rates by 25 basis points. On 18 April 2012, the state owned IDBI bank had cut down its lending and deposit rates by 25 basis points.
The banks’ move came in the backdrop of a 25-basis-point reduction in key policy rates by the Reserve Bank of India (RBI) on 17 April 2012. Now the ICICI Bank's base rate stands at 9.75% as against previous 10%.
ICICI Bank reduced its benchmark prime lending rate by 0.25% and its 'Floating Reference Rate' for consumer loans (including home loans) with effect from April 23. These benchmark rates are used to determine interest rates on loans and advances sanctioned up to June 30, 2010.
ICICI Bank also announced its interest rates for various tenors of retail fixed deposits by 0.25%. The reduced interest rates will take effect from 23 April 2012.
The slashed lending rates are expected to ease the burden of bank’s huge number of borrowers. The hiked interest rates were digging deep into the pockets of borrowers as all the banks were forced to increase their lending rates following the tougher monetary stance opted by the RBI over the past several quarters.
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