Kotak Mahindra Bank cuts base rate by 15 bps to 9.85%

Kotak Mahindra Bank has revised its base rate by 15 bps from 10% to 9.85% with effect from April 16, 2015. With this, the home loan rates will come down.

The bank follows other private and public sector banks that had slashed their base rates. ICICI Bank, State Bank of India, Axis Bank and HDFC Bank had cut their base rate last week after the Reserve Bank of India (RBI) bi-monthly monetary policy statement.

In its monetary policy statement, RBI said that transmission of policy rates to lending rates has not taken place so far despite weak credit off take and the front loading of two rate cuts. "With little transmission, and the possibility that incoming data will provide more clarity on the balance of risks on inflation, the Reserve Bank will maintain status quo in its monetary policy stance in this review." it added.

Last week, Axis Bank, the third largest private sector lender, had cut base rate by 20 basis points (bps), from 10.15% to 9.95% with effect from April 13. As a result, all loan rates will be reduced by 20 bps. Similarly, Lakshmi Vilas Bank also reduced its base rate by 0.15% to 11.10% effective April 14.

SBI and HDFC Bank had reduced their base rate by 15 bps each (to 9.85%), while ICICI Bank reduced it by 25 bps to 9.75% on the day of the bi-monthly monetary policy statement. These banks tweaked their rates after the Reserve Bank said that future rate cuts would depend on transmission by banks.