Indian Overseas Bank cuts interest rates for MSMEs

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Chennai, April 6 (IANS) In a move to aid micro, small and medium enterprises (MSMEs), state-run Indian Overseas Bank (IOB) announced on Friday that it has reduced interest rates in the range of 15-90 basis points (bps) across different categories of MSME borrowers.

IOB has also reduced the commission on opening of Letters of Credit and bank guarantees, according to a statement here.

“MSMEs are the backbone of Indian economy as they provide employment to over 120 million people. IOB is giving more thrust to financing MSME units by providing customised schemes launched to cater their varying needs,” it said.

For loans ranging from Rs 25 lakh to Rs 2 crore, the interest rate has been reduced by 50 bps.

For loans above Rs 2 crore, the reduction is between 15 to 90 bps, depending on the rating of the MSME unit. IOB said these reductions are effective April 1.

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The bank also announced a hike in the interest rates on fixed deposits (FDs) across various tenors by 10 to 80 bps effective from April 5.

Deposits off up to Rs 1 crore for tenors of between one week to five years and above now earn between 4.5 per cent and 6.8 per cent.

–IANS

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