BOB, SBBJ slash base rate by 25 bps and 15 bps, respectively

Two public sector lenders -- Bank of Baroda (BOB) and State Bank of Bikaner & Jaipur (SBBJ) - cut their base rate, benchmark used for pricing loans.

While BOB reduced rate by 25 basis points to 10 per cent, SBBJ, associate banking unit of State Bank of India, cut by 15 basis points to 10.10 per cent.

The revised base rate will be effective from May 6, 2015, BOB and SBBJ said in filings with the Bombay Stock Exchange.

Last week another public sector bank Bank of India had reduced rate by 25 basis points to 9.95 per cent.

BOB and SBBJ are among those banks that have taken a long time to reduce key lending rate. Reserve Bank of India and Government had flagged issue of delay or lack of monetary transmission (passing on benefit of lower cost of funds to final customers).

A few banks including SBI, ICICI Bank and HDFC Bank had reduced base rate on April 7, a day on which RBI unveiled its monetary policy for 2015-16. It had kept repo rate unchanged in policy.

Reserve Bank of India cut policy rate (repo rate) twice by 25 basis points each since January 2015. Now repo rate stands at 7.5 per cent.

According to finance ministry data following the reduction in the policy rate, out of a total 91 scheduled commercial banks (SCBs), 21 banks (four public sector, six private sector and 11 foreign banks) reduced their base rates in the range of 10-50 bps so far (up to April 15, 2015).

The weighted average lending rates on fresh rupee loans sanctioned by banks for housing loans and vehicle loans have also come down in the range of 8-53 basis points during the same period.