Public sector Indian Bank today said it will cut its lending rate by 0.30 per cent to 10.20 per cent with effect from February 9, 2013.

The bank has decided to reduce its base rate by 0.30 per cent from the existing 10.50 per cent to 10.20 per cent, with effect from February 9, 2013, a Indian Bank said in a statement.

It has also decided to cut its benchmark prime lending rate by 0.25 per cent.

"The Benchmark Prime Lending Rate of Indian Bank is reduced by 0.25 per cent from the existing 14.75 per cent to 14.50 per cent per annum with effect from February 9, 2013," it added.

Last week, Indian Bank Chairman and Managing Director T M Bhasin had said: "Rs 130 crore amount of funds is what has been released (by Reserve Bank to the bank).

"It will generate an additional income of 33 per cent since RBI decided to slash key interest by 0.25 per cent for banks and release Rs 18,000 crore additional liquidity into the system".

"We have decided to pass on the advantage (to our customers) and we have decided to reduce the base rate to 10.20 per cent from February 9, by 30 basis points (0.30 per cent) from the present 10.50 per cent," he had said.