State Bank of India, SBI cuts base rate by 0.25% to 9.75%

State Bank of India, SBI cuts base rate by 0.25% to 9.75%



India’s largest lender the State Bank of India  on Tuesday slashed its base rate, the minimum benchmark rate below which RBI does not allow a bank to lend, by 25 basis points to 9.75%. The bank took this decision in its asset liability committee meeting concluded late in the evening.

With this move borrowers will pay less interest for taking any form of retail or corporate loans. The rate cut was followed by the central bank's policy action of cutting cash reserve ratio (CRR) by 25 bps to 4.50%. CRR is the portion of deposits that banks mandatorily park with RBI. It does not earn any interest. The reduction in CRR is estimated to release Rs 17,000 crore to banks. SBI alone will get around Rs 2,500 crore, which leaves an opportunity to lend more.

Banks & Base rate (%)

SBI 9.75
ICICI Bank 9.75
HDFC Bank  9.80
PNB  10.50
Axis Bank  10
Union Bank of India  10.50