New Delhi: India's private sector lender HDFC Bank has decided to reduce its base rate -- the yardstick for pricing all loans -- and benchmark prime lending rate (BPLR) by 20 basis points each with effect from June 30, 2012, the Press Trust of India Friday said, citing an unidentified source.
Following the reduction in the lending rates, the bank's base rate will fall to 9.8% from 10% at present and BPLR will decrease to 18.3% from 18.5% at present, the agency said.
With the rate cut, HDFC Bank has become the first bank to reduce lending rate, after the Reserve Bank of India (RBI) kept all policy rates unchanged during its June 18 monetary policy review.
The central bank kept the short-term lending rate (repo) at 8% and the cash reserve ratio (CRR), or portion of deposits banks are required to park with the RBI, at 4.75%.
Most of the banks after the policy announcement have held on to their existing lending and deposit rates.
Meanwhile, India's largest lender -- the State Bank of India -- earlier Thursday cut interest rates on loans to exporters by 50 basis points within days of the Reserve Bank increasing the export refinancing limits of banks.
Earlier this month, RBI had decided to increase the cap on export refinancing to 50% from 15% earlier to inject liquidity and encourage banks to bolster credit flow to the export sector. The RBI's decision, to be effective fortnight beginning June 30, is expected to release Rs 300 billion into the banking system, according to the central bank.
Shares of HDFC Bank Friday ended at Rs 563.50 on the Bombay Stock Exchange, up 3.02% from the previous close.
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