New Delhi: Following peers, public sector Bank of Baroda on Tuesday slashed base rate or minimum lending rate by 0.25 percent to 10 percent.
The cut in base rate will benefit consumers as it will make auto, home and other loans cheaper.
"Bank of Baroda has informed the BSE that the bank has decided to reduce base rate by 25 basis points (0.25 percent) from 10.25 percent to 10 percent with effect from May 6, 2015," it said in a regulatory filing.
Leading banks including the market leader State Bank of India (SBI) and private sector lenders like ICICI Bank and HDFC Bank have already announced a cut in the lending rates by 0.15 to 0.25 percent following RBI Governor Raghuram Rajan's tough talk in April's first Monetary Policy review for 2014-15.
The RBI had reduced the policy rate by 0.5 percent in two tranches of 0.25 percent each in January and March. Both the rate cuts by RBI were out of its monetary policy ambit.
Referring to the reluctance of the banks to pass on the rate cut to the borrowers, Rajan termed as "nonsense" the lenders claim that cost of fund was still high.
"The banks marginal cost of funding (has) fallen, the notion that it hasn't fallen, is nonsense; it has fallen!" Rajan said on April 7 triggering reduction of lending rate by borrowers.
