Indian Bank, IOB cut lending rates by 0.25%

Indian Bank and Indian Overseas Bank (IOB) slashed lending rates by 0.25 per cent, in line with other lenders.

The separate announcements come a week after RBI reduced policy rate by 0.5 per cent.

The bank decided to reduce its base rate by 0.25 per cent from the existing 10.75 per cent to 10.50 per cent per annum, Indian Bank said in a filing on the BSE.

Similarly, IOB has also cut the base rate to 10.50 per cent from 10.75 per cent.

Base rate is the benchmark rate below which a bank cannot lend. With the reduction in the base rate all kinds of loans would be cheaper by at least 0.25 per cent.

The new rates of both the banks would be effective from May 1.

Another public sector lender Punjab and Sind Bank trimmed fixed deposit rates across various maturities in line with the market trend.

The new rates would be effective from April 28, 2012.

The peak fixed deposit rate of the bank has come down to 9.25 per cent from 9.75 per cent earlier.

Following the Reserve Bank's decision to cut key interest rate by 0.5 per cent to 8 per cent in its annual credit policy last week, several banks including ICICI Bank, IDBI Bank and Punjab National Bank have reduced both lending and deposit rates.

Earlier this week, State Bank of India (SBI) along with five more banks announced revision in their interest rates.

SBI trimmed interest rates on fixed deposits by up to 1 per cent across various maturities. There was upward revision of 0.25 per cent in case of fixed deposits of 180 days.

Source: Financial Express