IDBI Bank cuts base rate by 0.25% to 9.75%

RBI Governor Raghuram Rajan on Wednesday dismissed rumours that he is in the race for the job of Managing Director of the International Monetary Fund (IMF), saying he has not applied for it.

Mumbai: Following other lenders, state-run IDBI Bank on Wednesday cut its base rate by 0.25 percent to 9.75 percent, a day after the Reserve Bank slashed its key repo rate by 50 basis points.

The new base rate will be effective from October 5.

"The reduction in interest rate is expected to positively encourage loan growth, both in the retail consumer segment, as also revitalise fixed capital formation through higher corporate sector lending, thereby supporting the growth impulses in the economy," the bank said in a statement.

In the fourth bi-monthly monetary policy review yesterday, Governor Raghuram Rajan cut interest rate by 0.50 per cent, leading to a rush of base ret revisions by banks, led by State Bank of India.

Earlier in the day, Bank of Baroda and Axis Bank had also reduced their base rates.

Besides, Punjab National Bank (PNB) cut its base rate by 0.40 percent to 9.60 percent, effective from October 1.

Oriental Bank of Commerce (OBC) slashed its base rate by 0.20 percent to 9.70 percent, with effect from September 30.

Axis Bank reduced its base rate by 0.35 percent to 9.50 percent, while Bank of Baroda cut its minimum lending rates by 25 basis points to 9.65 percent.

The new rates of both the banks will be applicable from October 5.

Banks have started reducing their base rates after the RBI, in a surprise move, reduced repo rate by 50 basis points to 6.75 percent from 7.25 per cent.

Country's largest lender State Bank of India yesterday cut its base rate by 40 basis points to 9.30 percent from 9.70 percent.

A few state-run lenders such as Bank of India and Andhra Bank had also reduced their base rates by 0.25 percent to 9.70 percent and 9.75 per cent, respectively.

IDBI Bank has also reduced the retail term deposit rates in select buckets by 25-50 basis points with effect from October 5.