Oriental Bank of Commerce cuts lending rate by 0.25%
New Delhi: State-owned Oriental Bank of Commerce has announced a cut of 0.25 percent in minimum lending rate to 10 percent, joining the league of PSU banks which reduced base rate after nudging by finance minister.
The bank has reduced base rate by 25 basis points, or 0.25 percentage points, from 10.25 percent to 10 percent, Oriental Bank of Commerce (OBC) said in a statement.
All loans linked to base rate would become cheaper by at least 0.25 percent. Base rate is the minimum lending rate below which banks cannot lend.
The new rate would be effective from July 22, it added.
Following Finance Minister P Chidambaram's advice last week, some banks, including Canara Bank, Union Bank of India and Bank of India reduced base rate by up to 0.3 percent.
During the meeting with heads of public sector banks last week, the finance minister had asked banks to consider reducing lending rates to stimulate credit growth.
"We have advised banks to take a look at the base rate. The base rate of SBI is 9.7 percent. The average of the base rate of other banks is 10.2 or 10.25," he had said.
A cut in the base rate would be a powerful booster for the economy and a powerful stimulus to credit growth, he had said.