After a number of base rate hikes by all the lenders over the past 20 months, the state-run Union Bank of India today sounded a reversal of the trend with a 10 basis points cut in its minimum lending rate to 10.65 percent.
"Our asset liability committee in its quarterly review of interest rates has decided to bring down base rate by 10 basis points from 10.75 to 10.65 percent with immediate effect," a statement from the city-headquartered lender said.
Following 13 rates hikes by the Reserve Bank in the past 20 months, banks have passed on their rising cost of funds. And this rate cut is the first such action by a bank in the present cycle.
The move comes a fortnight after the RBI paused and indicated towards an easing of the monetary policy in its mid- quarter policy review on December 16, alarmed by the dent to growth prospects.
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