The move by RBI to cut the repo rate by 50 basis points has gripped the market and responding to it Andhra Bank has reduced its base rate by 0.25 per cent effective today, while the largest lender SBI has made it effective from October 5.
The Reserve Bank of India earlier slashed the benchmark repurchase (repo) rate from 7.25 per cent to 6.75 per cent, lowest in four-and-half-years and the country’s largest lender State Bank of India (SBI) soon reacted slashing its minimum lending or base rate by 0.4 per cent to 9.3 per cent.
With this all SBI loans, including home, auto and corporate, would become cheaper by at least 0.40 per cent. “RBI has cut interest rate by 0.50 per cent, we have reduced it by 0.40 per cent,” said SBI Chairperson Arundhati Bhattacharya in a statement.
The SBI has also reduced its fixed deposit rates by 0.25 per cent across various maturities from October 5. "Going ahead, weakening of rate will add to growth of credit,” she said.
Meanwhile, Sensex rallied nearly 500 points from day’s low on Tuesday after the RBI announcement despite tumbling down around the global equity markets in the wake of recession trends.
The S&P BSE Sensex ended Tuesday 162 points, or 0.63 percent, higher at 25,778.66 while the 50-stock Nifty50 gained 47.60 points, or 0.61 per cent, to 7,843.30.