Mumbai: State-run Union Bank of India and Dena Bank on Friday cut their base rate, or minimum lending rate, joining a host of lenders that reduced borrowing costs after the Reserve Bank of India (RBI) lowered its key policy rate on 29 January in a bid to revive economic growth.
Union Bank of India cut its base rate by 0.25 percentage point to 10.25% with effect from Saturday, the bank said in a release. It kept deposit rates unchanged. Dena Bank cut its base rate by 0.20 percentage point to 10.25%, with effect from Saturday.
Following the RBI rate cut, State Bank of India, the nation’s largest, had cut its lending rate by 5 basis points (bps) to 9.7%.
One basis point is one-hundredth of a percentage point.
RBI cut its repo rate—at which it lends short-term funds to banks—to 7.75% and cash reserve ratio, the portion of deposits banks need to park with RBI, to 4%.