Punjab & Sind Bank announced that it is lowering its marginal cost-based lending rate (MCLR) by 10 basis points for its three-month duration loan. MCLR for a few other tenors were also reduced by 5 basis points. Earlier today, Bank of Maharashtra has lowered its MCLR by 5 basis points for all tenors. Both these rate cuts will be effective from November 7, 2017.
As per the new revised rates, loans at Punjab & Sind Bank for a three-month duration will now attract an interest rate of 8.10% compared to the previous interest rate of 8.20%. Loans for one-month, one-year, and three-year tenors will now attract interest rates of 8%, 8.40%, and 8.85% respectively, down 0.05% from their previous rates.
MCLRs for overnight and six-month tenors remained unchanged at 8% and 8.20% respectively. The bank’s base rate also remained unchanged at 9.70%.
Bank of Maharashtra, on the other hand, has reduced its MCLR for all tenors by 0.05%. As of now, MCLR for overnight, one-month, three-month, six-month, and one-year tenors stand at 8.10%, 8.15%, 8.20%, 8.55%, and 8.65% respectively. Base rate for the bank remained unchanged at 9.60%.
MCLR was introduced by the Reserve Bank of India (RBI) as the benchmark of lending rates from April 1, 2016 onwards. Before its introduction, base rate was used as the benchmark by banks for lending. Banks will lend money to new borrowers by using the MCLR. People who have taken loans before April 2016 have the option of continuing with the old system or shifting to the new system.
A week ago, the country’s largest lender State Bank of India (SBI) lowered its one-year MCLR by 0.05%. The RBI aims to lower lending rates in order to promote credit growth in the country. With the economic slowdown looming over the country, more banks are expected to lower the lending rates in order to increase private investment in the economy.
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