Following the Reserve Bank of India’s key policy rate cuts on January 29, Bank of Maharashtra (BoM) today slashed its base rate by 25 basis points.
The Pune-based public sector lender informed the Bombay Stock Exchange that it has reduced its base rate by 25 bps from 10.50 per cent to 10.25 per cent per annum on a monthly compounding basis. The new rates will be effective from February 9.
The RBI cut the repo rate (rate at which the RBI lends short-term money to banks) and cash reserve ratio (the share of bank deposits parked with the RBI) by 25 bps each in its third monetary policy review.
C. VR. Rajendran, Executive Director, BoM said, “The 25 bps cut in CRR does not permit us to cut the base rate. However, growth is important and, hence, monetary transmission must take place.”
“The CRR cut will release about Rs 250 crore of liquidity to the bank. While the margins will be affected to the extent of 15 bps,” Rajendran added.
The banks see a dip in credit growth to about 45 per cent from 49 per cent in the October to December quarter FY13.
“In the fourth quarter, our focus will be on the priority sector. Hence, we see a moderation in credit growth,” Rajendran said.
The bank’s scrip ended lower at Rs 57.10 per share, down by 2.31 per cent on the BSE.