IDBI Bank, one the leading public sector banks, announced that the bank has reduced its base rate by 25 basis points to 9.75% with effect from Oct. 05, 2015.

The base prime lending rate (BPLR) of the bank has also been reduced by 25 bps to 14.25% p.a. with effect from Oct. 05, 2015 in line with the reduction in base rate. It has also decided to reduce the retail term deposit rates in select buckets by 25 and 50 bps with effect from Oct. 5, 2015.

The bank said, 'IDBI Bank has taken this pro-active step, keeping in view the recent policy measures announced by the RBI.'

'The reduction in interest rate is expected to positively encourage loan growth; both in the retail consumer segment, as also revitalize fixed capital formation through higher corporate sector lending, thereby supporting the growth impulses in the economy,' it added.

The bank announced reduction in base rate after the RBI reduced key interest rates by 50 basis points. 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 company declined Rs 2.6, or 3.2%, to settle at Rs 78.75. The total volume of shares traded was 2,810,978 at the BSE (Wednesday).