Central Bank, BoI cut base rates

Central Bank of India and Bank of India today slashed their base rate by 25 basis points each. The base rate for both public sector banks now stands at 10.25 per cent. Base rate is the rate below which banks cannot lend. All floating rate loans linked to the base rate will turn a tad cheaper. The banks that have cut their base rate so far include IDBI Bank, State Bank of India, Punjab National Bank, Union Bank of India, and Royal Bank of Scotland. On Tuesday, the central bank lowered the repo rate (the interest rate at which RBI lends short-term funds to banks) and cash reserve ratio (the slice of deposits that banks have to park with RBI) by 25 basis points each.