Mumbai: IDBI Bank Ltd on Tuesday cut its lending and deposit rates shortly after the Reserve Bank of India (RBI) slashed its key lending rate and cash reserve ratio (CRR) for banks, signalling an easy monetary policy to prop up growth in the economy.
State-controlled IDBI Bank cut its base rate, or minimum lending rate by 0.25 percentage point to 10.25% and an identical reduction in select maturity retail deposits, effective 1 February.
“IDBI Bank has taken this pro-active step, keeping in view the policy measures announced by the RBI in its third-quarter review of monetary policy today,” the bank said in a release. “The reduction in interest rate is expected to positively impact loan growth, both in the retail consumer segment, as also revitalize fixed capital formation through higher corporate sector lending, thereby supporting the growth impulses in the economy.”
RBI cut its repo rate, at which it lends short-term funds to banks to 7.75% and CRR, the portion of deposits banks have to park with the apex bank, to 4%.