On Tuesday, state-run banks Punjab National Bank (PNB) and Indian Overseas Bank announced lowering of their lending rates pegged to the repo rate by as much as 75 bps. One bps is one-hundredth of a percentage point. The new rates will come into effect from April 1. The cut in interest rate on borrowing follows RBI's decision wherein it cut repo rate by steep 75 basis points.
"We have decided to pass on the full benefit of the recent RBI's policy rate cut of 75 bps to our borrowers covered under external benchmark-linked product of repo-linked lending rate (RLLR)," PNB said in a statement. The rate cut is for both retail as well as MSME borrowers, added the bank.
Also, on the sidelines, Chennai-based Indian Overseas Bank also lowered its RLLR by 75 bps. So, effective today the new RLLR stands reduced to 7.25% per annum from 8% earlier.
"Retail loans (housing, education, vehicle), loans to MSME, which are linked to RLLR, will now be available at cheaper rates," IOB said in a statement.
Also, PNB has lowered its marginal cost of fund based lending rate (MCLR) by 30bps across tenure and the rates shall apply for the amalgamated bank. Effective April 1, OBC and United Bank of India will be merged into PNB.
IOB also effective April 10 has slashed its one-year MCLR from 8.45% to 8.25%.
Union Bank of India has also slashed its MCLR across tenures by 25bps. Effective April 1, 1-year MCLR at the bank stands reduced to 7.75% from 8%. The new rates will also apply to customers of Corporation Bank and Andhra Bank which will be merged into Union Bank of India with effect from April 1.
Also, after the SBI has slashed term deposit rates to 5.7% for 1-10 year FD, PNB has also announced rate cut on its deposit rates across maturities with maximum rate at 5.8% for 1 year and above.