Public sector Bank of Maharashtra on Friday announced a cut on the benchmark one-year MCLR by 0.10 percent to 8.60 percent, a day after the Reserve Bank of India cut its repo rate by 0.25 basis points.
"Bank of Maharashtra has reviewed and reduced its marginal cost of funds based lending rates (MCLR) with effect from June 7, 2019," it said in a release.
The one-year MCLR is the benchmark against which most retail loans such as auto, personal and home loans are priced.
Among other loan tenors, the overnight MCLR was cut by 0.05 percent to 8.15 percent, while the three-month tenor rate has been slashed by an equal margin to 8.40 percent.
Earlier on Thursday, RBI announced its a cut in its repo rate by 0.25 percent to 5.75 percent. It is one of the key rates that is regulated by the central bank. While it is the rate at which banks can borrow from the RBI, it cut in the interest rate will boost growth as will increase the flow of funds in the economy.
India's economic growth has been estimated to slow down to a five-year low of 6.8 percent in 2018-19.
Of late, commercial banks have been quick in reflecting the change in policy rates, however, a large number of banks are still to pick up pace.