Private banking major ICICI Bank today cut base rates by 25 basis points (bps) to 9.75 percent. The revised base rate will come into effect from April 10. The current base rate is 10 percent.Apart from cutting the minimum lending rate, India's largest private sector lender has also cut rates on some retail fixed deposits effective the same date.The move comes merely a few hours after state lender State Bank of India and HDFC Bank cut their base rate by 15 bps to 9.85 percent.
The rate cuts come on a day when the Reserve Bank Governor Raghuram Rajan refused to take any action on policy rates thereby nudging banks to pare their rates.
In its policy statement the RBI today said: Transmission of policy rates to lending rates has not taken place so far despite weak credit off take and the front loading of two rate cuts. With little transmission, and the possibility that incoming data will provide more clarity on the balance of risks on inflation, the Reserve Bank will maintain status quo in its monetary policy stance.
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