OBC cuts interest rate on export credit by 0.25%
New Delhi: Oriental Bank of Commerce (OBC) today announced 0.25 percent cut in lending rate on export credit in response to RBI increasing the export re-finance limits of banks to 50 percent.
Earlier this week, the Reserve Bank decided to enhance the Export Credit Refinance (ECR) limit to 50 percent of the outstanding rupee export credit for banks, from 15 percent, a move that will inject Rs 30,000 crore into the system.
The enhanced limit will be effective from fortnight beginning June 30, 2012, RBI had said.
The new rate would be effective from July 1, OBC said in a statement.
Export credit rate is linked to base rate. The rate varies between 2.5-6 percent over the base rate depending on various factors including credit rating.
Currently, the base rate or minimum lending rate of the OBC is 10.5 percent.
The benefit of the reduced interest rates would be available on all existing and future export credit in rupees.
The bank has also introduced a new scheme for its existing as well as new borrowers belonging to mid corporate segment including MSMEs, which would offer attractive rate of interest based on the financials, available collateral coverage and credit rating of the borrower, it said.
The interest rate for such borrowers having credit limits above Rs 1 crore and upto Rs 50 crore would vary from base rate plus 2 percent to Base Rate plus 3 percent.
The existing normal rate of interest being charged for MSME borrowers ranges between Base Rate and 2.75 percent to Base Rate plus 4 percent, it said.
Further, it said, the borrowers who have obtained external credit rating from RBI approved credit rating agencies, would be eligible for a further incentive in rate of interest at 0.25 percent for top three higher rating of the concerned rating agencies.
The existing as well as new borrowers specially MSMEs would have access to finance at competitive rates, which are amongst the best in the industry, it added.
To encourage units which promote agriculture sector, employment generation and provide benefit to larger sections of the society, the bank has slashed interest rates by 1 to 2.5 percent on loans to rice shellers, cotton ginning, other agro-food processing units, overdraft to farmers, overdraft to commission agents (Arthiyas) and loans against warehouse receipts.
In all these preferred segments of economy, the maximum lending rate is 1.5 percent over base rate of the bank, it said.
These rates are applicable irrespective of credit rating of the units, it added.