New Delhi: After the Reserve Bank of India cut repo rates by 50 basis points on Tuesday, banks have started passing on the benefits to consumers. The country's largest bank State Bank of India has cut its lending rate by 0.4 per cent to 9.3 per cent.
Andhra Bank was the first lender to cut rates to 9.75 per cent.
The heads of HDFC Bank and ICICI Bank have said they will pass on the benefits to consumers.
ICICI Bank head Chanda Kochhar said, "Interest rates will come down soon. A large part of the cut will gtet transmitted. We were the first ones to cut the lending rate even when the cuts started and when I say large part will get transmitted I mean more than half."
Earlier, while announcing rate cuts, RBI Governor Raghuram Rajan had expressed hope that banks will pass on the benefits to consumers. "We will work to remove hurdles so that banks can pass rate cuts," Rajan said in the fourth bi-monthly review of the monetary policy in the current fiscal.
Rajan cut repo rate by 50 basis points to four-year low of 6.75 per cent. The cash reserve ratio (CRR) has been kept unchanged at 4 per cent. With the cut in the repo rate, EMIs are expected to come down as RBI has cut lending rate to banks.
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