Industrial Credit and Investment Corporation of India Bank cuts loan rates, Public Sector Banks are next

Even as public sector banks gear up to announce further rate cuts by next week, the country’s second-largest lender, ICICI Bank, on Thursday announced a 0.50% reduction in both retail and corporate rates. All existing floating-rate retail loan customers will benefit from the reduction. This is the third time the bank has pared its rates in the last six months. Explaining the decision, a bank spokesperson said, “Our cost of funds has fallen.”

ICICI Bank’s new floating reference rate is applicable to all floating-rate retail loans (including home loans) and will come into effect from Friday. The revised FRR stands at 12.75% pa, against 13.25% pa at present. The bank also announced a 0.50% reduction in its benchmark advance rate to 15.75% pa.

However, ICICI Bank has ruled out any more rate cuts in the immediate future. “We would not follow public sector banks in cutting our rates further,” the spokesperson said.

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