By Saikat Das, ET Bureau | 5 May, 2015, 10.34PM IST | Economic Times

MUMBAI: Home loan borrowers will now have a wider universe to avail lower rates as three more state-owned lenders including Bank of Boroda, State Bank of Bikaner & Jaipur or SBBJ and State Bank of Hyderabad or SBH have reduced base rates by 15-25 basis points each.

Lenders cannot lend to customers in less than base rates.

Bank of Baroda has cut base rate by a quarter of a percentage point to 10% effective from Wednesday, the lender said in a notice to stock exchanges. The bank offers home loans at base rate only irrespective of any maturity or quantum.

SBBJ and SBH, both SBI associate banks, have trimmed base rates by 15 bps each to offer at 10.10% and 10.05%.

Last Saturday, Bank of India announced a reduction in its base rate to 9.95% from 10.20% earlier.

Country’s largest lender, the State Bank of India cut base earlier in April by 15bps to 9.85% after the Reserve Bank of India governor prodded all banks for passing on the central bank’s rate cut benefits to end-consumers.

On competitive pressure, two largest private sector lenders – ICICI Bank and HDFC Bank – were quick enough to act pruning their base rates on the same day. ICICI Bank offers the lowest rate in the industry at 9.75% while HDFC Bank’s base rate is on par with the SBI.

“Banks marginal cost of funding has fallen, the notion that it hasn’t fallen is nonsense,” Raghuram Rajan, governor of RBI had said soon after announcing the bi-monthly monetary policy on April 7.

Among other banks, Union Bank of India and United Bank of India had lowered their base rate to 10% in February itself.

Private sector lender Axis Bank cut base rate by 20bps to 9.95% in April while Kotak Mahindra Bank reduce the same by 15 bps to 9.85%

The RBI had reduced the benchmark or repo rate, at which banks borrow short term funds from the central bank, twice by 25bps each between January and March this year. It is now 7.50%.

Source : http://goo.gl/FOuqNl