The foreign bank, Royal Bank of Scotland, has reduced its base rate by 75 basis points and brought it down to 9 percent, from the existing 9.75 percent. Base rate is the rate below which banks are not allowed to advance loans to customers. Base rate plus spread determines the actual interest rate on a loan.
While making the announcement, the Managing Director and Country Head (International Banking) of RBS, Mr. Brijesh Mehra said, "The RBI move to cut repo and CRR by 25 bps is in sync with our expectations. In line with the potential deflationary environment, RBS has decided to cut its base lending rate."
With this step, RBS has become the first foreign bank in the country which has slashed its benchmark rate post the key policy rate cuts by Reserve Bank of India in its monetary policy review. It should be noted that RBI slashed its repo rate and CRR by 25 bps in its monetary policy review announced on January 29.