The Reserve Bank today issued a notification to reduce the bank rate or the interest the banks and financial institutions pay to the central bank on borrowed funds to 9 per cent from 9.5 per cent now. "The Reserve Bank of India (RBI) has decided to lower the Bank Rate to 9 per cent per annum from 9.5 per cent per annum with effect from April 17,2012," the RBI said in a statement. The notification follows the announcement made by RBI Governor D Subbarao in the annual credit policy which was unveiled yesterday. In line with 0.5 per cent cut in short-term lending (repo) rate,the RBI also reduced the bank rate to 9 per cent. The RBI decided to reduce the benchmark repo rate to 8 per cent from 8.5 per cent,after a gap of three years,to promote growth which during 2011-12,which slipped to a three year low of 6.9 per cent. The central bank has pegged the GDP growth rate for the current fiscal at 7.3 per cent.
