State Bank of India has reciprocated the move of 0.25% cut in CRR by 0.25% cut in its Base Rate. The new Base Rate for SBI will be 9.75%. This is lowest Base Rate at present for Public Sector Banks. In Private Banks ICICI has the same rate and this also happen to be lowest in Indian banking at present. With the festive season started and lot of banks offering festival bonanza for its customers other banks may also start reducing the rates. The loan customers will be happy a lot.
Base Rate is the minimum lending rate the bank offers to any customer. It cannot lend less than its Base Rate. Base Rate is fixed by bank after knowing its cost of funds, yield on advances and maturity pattern of both.
Sep 19, 2012
RBI mid term term monetary policy
The RBI in its mid term monetary policy has announced a cut of 0.25% in Cash Reserve Ratio (CRR). So the new CRR will be 4.5%. Hence the banks will have to keep less money with the RBI and lend more. The amount that is expected to be released to the banking system will be approx. Rs.17000 crores.
This is possitive for borrowers since the banks having more money to lend may reduce their interest on loans.
The RBI has kept other rates unaltered (Repo and Reverse Repo rates).
This is possitive for borrowers since the banks having more money to lend may reduce their interest on loans.
The RBI has kept other rates unaltered (Repo and Reverse Repo rates).
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