State-owned lender Bank of India today indicated 10-25 basis points reduction in its base rate shortly. “We will have to fall in line with our peers and hence we are also looking at a reduction in our base rate in the range of 10-25 basis points. The decision is likely next week or so,” Bank of India chairman and managing director Vijaylaxmi Iyer told reporters here.
She said the prime reason for the rate cut will be the decline in cost of funds, following reduction in the cost of deposits. Iyer was speaking after signing two agreements with the state-owned non life insurer New India Assurance for the Pradhan Mantri Suraksha Bima Yojana (PMSBY) product and with Star Union Dai-ichi life Insurance for the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) scheme.
Both the schemes, which will be on offer from May and implemented on June 1, will be made available for all the seven crore customers of the bank. The bank has already opened more than 1.82 crore accounts under various financial inclusion initiatives, out of which 70.2 lakh accounts have opened since the launch of the Jan Dhan Yojana, she said. Risk coverage of Rs2 lakh is available in case of death for any reason under PMJJBY and Rs2 lakh for accidental deaths and full disability under PMSBY.