HDFC Bank cuts rate by 35bps to 9.35%

HDFC Bank cuts base rate by 35 BPS to 9.35%-- competition to intensify, negative for HDFC Bank and banking sector

HDFC Bank has cut its base rate by 35 basis points to 9.35% effective September 1, 2015. The bank had already cut base rate twice since April 2015 and the new base rate of 9.35% would be the lowest in the banking sector.

While this will have some impact the net interest margins of bank, its high CASA balances, increase in loan volumes and favourable loan mix (higher proportion of fix rate products) would limit the impact of reduction rates.