Andhra Bank, the public sector lender, Tuesday reduced its base rate by 25 basis points (bps) to 9.75 percent with effect from today, ie, Sept. 29, 2015.
The bank announced reduction in base rate after the Reserve Bank of India (RBI) Governor, Raghuram Rajan, said that the RBI will work with the government to enable the banks to transmit the rate cut.
The RBI has collectively reduced 125 basis points in key interest rates, but so far the banks have succeded in transmitting approx 30 basis points.
The RBI announced on Tuesday reduction in key interest rates in the fourth bi-monthly monetary policy review. Repo and reverse repo rate reduced by 50 basis points, which is higher than expected 25 basis points cut.
Now revised repo and reverse repo rate stood at 6.75% and 5.75% respectively compared with 7.25% and 6.25% earlier.
Shares of the bank gained Rs 0.2, or 0.3%, to trade at Rs 67.40. The total volume of shares traded was 269,173 at the BSE (12.19 p.m., Tuesday).