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- December 2013
, 20 Apr 2012
Following RBI's announcement on lowering repo rate by 50 basis points at Tuesday's annual monetary review several banks have decided to pass on the reduction in their lending rate to customers.
ICICI Bank, the first of the lot, has reduced base rate and prime lending rate (PLR) by 25 basis points making the new base rate 9.75% instead of the earlier 10%. Prime lending rate is used to determine rate the bank's lending rate on various loans. Interest rate on term deposits of different tenures has also been reduced by 25 basis points. New rates will apply from 23 April 2012.
Punjab National Bank has brought down base rate and PLR by 25 basis points. That makes its base rate 10.75% and PLR 14.25%. New rates will be effective from 1 May 2012.
IDBI Bank, Bank of Baroda, Syndicate Bank have joined the wagon to cut base rates by 25 basis points each. IDBI Bank's new base rate is 10.5% and PLR is 15% wef 20 April 2012. The bank has also announced reduction on term deposit rates by 10 to 50 basis points on deposits of maturities over six months.
Bank of Baroda's new base rate stands at 10.5% and PLR at 14.75% wef 1 May 2012. Retail term deposit rates have been reduced by 25 to 50 basis points on various maturities from 23 April 2012 for deposits below Rs 15 lakhs and NRE deposits.
Syndicate Bank has slashed base rate and PLR making them 10.5% and 14.75% respectively. New rates will be applicable from 1 May 2012. Rates on domestic term deposits under Rs 15 lakhs for select maturities have been lowered.
Bank of Maharashtra has announced to cut base rate by 10 basis points, effective from 1 May 2012. All loans linked to base rate will be benefited from the lowered rate.
Lowered base rate and PLR mean lowered EMIs on home loan, personal loan and vehicle loan linked to them. How hearty this should make you depends on how big a loan you want to take. For existing borrowers of home loan, car loan and personal loan, reduced rate may not actually translate into reduced EMIs since many banks might reduce the loan tenure instead of cutting EMIs. During the past 13 interest rate hikes from March 2010, most banks had passed it on to borrowers by stretching the loan tenure without increasing EMIs.