Even as the RBI in a surprise move held the key policy rates steady at 5.15% in its December 5 bi-monthly monetary policy meet, both private and public sector banks have been reducing their lending rates (MCLR rates). Most of the retail loans including home loans are pegged to one-year marginal cost of funds based lending rate.
Over the past one week, banks have slashed their MCLR rate across various tenures by up to 20 basis points. One basis point is one-hundredth of a percentage point. Since February this year, the Reserve Bank of India in order to provide impetus to the slowing economy has cut repo rate by 135 bps to 5.15%, which is a 9-year low rate.
So, here are some of the banks that have cut interest rate on loan on a recent basis:
1. SBI reduces MCLR by 10 bps: On Monday, the leading state-run lender State Bank of India reduced MCLR rate by 10 bps. The revised one-year MCLR stands at 7.9% as against the earlier 8%. This is the eight-straight reduction in MCLR rate by the bank in the FY 2019-20. The lending rates offered by the bank are the cheapest among its peers.
In a statement SBI said, "To pass on the benefit of our falling cost of funds to customers, we have reduced MCLR by 10 bps across all tenors".
2. Bank of India lowers MCLR by 20bps: Following SBI, Bank of India too slashed its MCLR rate by 20 bps across several tenures on December 9. For one-year MCLR, the rate has been revised lower by 10 bps to 8.20% in comparison to the earlier 8.30%.
Kolkata based bank has slashed its overnight-MCLR rate by 20 bps while for other tenures the cut is of 10 bps. So, with it, overnight-MCLR rate stands at 7.75%.
3. UCO Bank revises MCLR rate lower by 10 bps: On December 10, UCO Bank lowered MCLR rate across tenures by 10 bps. The new one-year MCLR is 8.3% as against the existing 8.4%. Further, for overnight, one, three and six-month, MCLR rate has been slashed by 10 bps.
4. Union Bank of India cuts MCLR by 5-10 bps: On the same day, Union Bank of India revised its MCLR rate lower by 5-10 bps across tenure. So, post the cut, the bank's one-year MCLR becomes 8.2% as against 8.25%.
5. Bank of Baroda lowers MCLR to 8.25%: Close on the heels of other banks cutting rates, Bank of Baroda on December 10 slashed its marginal cost of funds based lending rate by 5bps across tenure. The new rates become applicable from December 12, 2019. One-year MCLR rate has been brought down to 8.25%. For other tenures, i.e. overnight to six month-MCLR rate, the interest rate ranges between 7.65- 8.10%.
6. HDFC Bank's one-year MCLR falls to 8.15%: For all of the tenures, the private lender HDFC Bank cut MCLR rate by 15 bps. So, the revised one-year MCLR rate is 8.15%, while six-month MCLR is reduced by 10 bps to 8%.