Loans to get cheaper as banks cut lending rates
New Delhi: Leading banks such as SBI, ICICI, PNB, BOB, Central Bank of India cut their lending rates and made loans cheaper. The new rates will come into effect immediately.
They cut the marginal cost of funds-based lending rates (MCLRs) across tenures for the first time after the Reserve Bank of India (RBI) lowered the repo rate by 25 basis points to 5.75% in June.
For one year tenure, ICICI cut MCLR cut 10 bps to 8.65. For shorter tenures i.e. for overnight and one-month lending rate is 8.40% while 6-month and 3-month stand at 8.60% and 8.45%, respectively.
PNB and Central Bank of India have also revised the MCLR rate lower by 5 bps across tenure. Now, the one-year MCLR of these public-sector lenders stands at 8.40% and 8.50%, respectively. 1-year MCLR for SBI, HDFC Bank and BOB are 8.45%, 8.7% and 8.7%, respectively.
On June 6, the RBI cut the repo rate by 25 basis points and asked the banks to immediately pass on the benefits to their customers. As a result, all the top lenders cut their deposit rates by 5 to 25 bps in June.
So far in 2019, the RBI has made three rate cuts amounting to a total 75 bps and indicated a further rate cut as it changed its stance to accommodative from neutral on June 6.