Banking Sector Sees Major Rate Cuts to Stimulate Economy
State-owned Bank of Baroda and private sector HDFC Bank have announced reductions in lending rates following the Reserve Bank of India's decision to slash the policy repo rate by 50 basis points. This move aims to stimulate the economy by making borrowing cheaper for consumers.
- Country:
- India
The state-owned Bank of Baroda (BoB) announced a 50 basis points cut in its benchmark lending rate linked to the repo rate, aligning with the Reserve Bank of India's strategic rate reduction.
On the other hand, the private sector heavyweight, HDFC Bank, reduced its Marginal Cost of Funds-based Lending Rates (MCLR) by 10 basis points, providing relief to borrowers tied to this benchmark across varying loan tenures.
This cascading effect comes on the heels of the RBI's unexpected decision to lower the repo rate by a significant 50 basis points to 5.5%, alongside a 100 basis points reduction in the cash reserve ratio to 3%. This policy shift aims to inject more funds into the lending ecosystem, expecting to boost economic activity.
(With inputs from agencies.)
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