Following State Bank of India's lending rate cut move, Bank of India on February 7 reduced marginal cost of fund based lending rate ( MCLR) by 10 bps for maturity term of up to 6 months.
After the reduction, home loan stands reduced to 8% while auto loans shall be available at a starting rate of 8.5%. The new rates shall become effective from February 10.
Earlier on February 7, SBI reduced MCLR by 5 basis points or 0.5% across all tenures. The new rates come into effect from February 10. So, 1-one year MCLR at SBI comes down to 7.85% per annum from 7.9%.
The new lower rates on lending are transferred to borrowers as some of the measures announced in the RBI's February MPC statement shall reduce the overall cost of funds for banks. Interestingly, loan rates will become cheaper even as the RBI kept key repo rate steady at 5.15%.