Zee Media Bureau
New Delhi: Joining India's largest bank SBI, leading private lender, HDFC Bank on Tuesday cut its lending rates by 0.15 percent to 9.85 percent, to be effective April 13.
Earlier in the evening, SBI cut base lending rate by 0.15 percentage point to 9.85 percent, becoming the first major lender to ease the rate in many months.
The Reserve Bank of India (RBI) had earlier on Tuesday kept the policy rate unchanged disappointing industry and consumers but a virtual war of words broke out with Governor Raghuram Rajan terming as "nonsense" the banks' refusal to pass on benefits on grounds of high cost of funds.
Nudged by the central bank, the SBI made the surprise move which would come into effect from April 10.
Prior to the rate cut, HDFC Bank's chief Aditya Puri said the base rate cut is a function of the deposit cost.
"If the deposit cost goes down, then there will be a base rate cut. If it doesn't there won't be any base rate cut. However we feel between now and June, there should be repricing of cost and that will lead to a lower cost of funds for borrowers," he said.
With PTI Inputs
