With the Reserve Bank of India reducing the repo rate by 25 basis point will not be immediately passed on to customers, said Mr. S. Chandrasekharan, Executive Director, UCO Bank.
"Most banks had reduced their base rates post the 25 basis point reduction in policy rates announced by Reserve Bank of India in January this year. So there is little scope for banks to reduce lending rates further, at least till March 31," Mr. Chandrasekharan said.
The public sector lender, UCO Bank had reduced its base rate by 30 basis points to 10.2 per cent after the reduction of rates in January. Banks have also increased the interest rates on deposits in certain segments, particularly for retail depositors.
"Unless the cost of deposits comes down it will be difficult to pass on the benefit by way of a cut in lending rates," Mr. Chandrasekharan pointed out.