One of the leading PSU Bank, PNB, reduced base lending rate by 20 basis points from the earlier 9.35% to 9.15%. The rates shall be applicable with effect from September 1. One basis point is one-hundredth of a percentage point.
Alongside, the bank has also reduced MCLR or maginal cost of funds based lending rate by 20-25 basis points which shall also come into force from tomorrow i.e. September 1, 2017. The Delhi based bank's MCLR for 3-month is 8% while one-year MCLR is at 8.15%. As of now, SBI has the lowest base rate which stands at 9%. The banks' three-months and one-year MCLR rates stand at 7.9 and 8% respectively.
Cumulatively between January 2015 and June 2017, repo rate cut has been made by a staggering 175 basis points by the RBI. With it RBI has been constantly pushing and pulling banks to pass on the cut in key policy rates to customers in the form of lower lending rates.
This is despite the fact that RBI acknowledges that transmission of past rate cuts in repo or policy rate to lending rate has not yielded much results and the credit growth at PSUs still remains a concern.