New Delhi: Country's second largest public sector bank PNB on announced cut in lending rate by 0.25 percent, a move that will make housing and corporate loans cheaper.

"The bank has decided to decrease the base rate by 25 basis points from 10.75 percent to 10.50 percent," Punjab National Bank said in a statement. The base rate is the minimum interest rate below which banks can't lend.

With the reduction in rates, likely to be followed by other lenders, housing and corporate loans would become cheaper by at least 0.25 percent.

Besides, PNB has also decided to slash interest rate on term deposits of less than 1 crore by 0.25-0.50 percent in select buckets.

The new rates will be effective from May 1, the bank said.

The decision comes barely two days after the RBI reduced the short-term lending (repo) rate by 0.5 percent to 8 percent in its monetary policy on Apri 17.

IDBI Bank had announced cut its lending and deposit rates on Wednesday.