In a bid to pass on RBI's rate cut benefits to its borrowers, Canara Bank has cut its repo-linked lending rate (RLLR) by 75 basis points (bps) from 8.05 per cent to 7.30 per cent, with effect from April 7. The lender has also reduced its marginal cost of funds based lending rates (MCLR) on loans and advances across all tenors by up to 35 basis points across tenors, effective April 7, Canara Bank said in a regulatory filing.
The bank has reduced one-year MCLR by 35 basis points to 7.85 per cent, and that for six months by 30 basis points to 7.80 per cent.
While three-month MCLR has been slashed by 20 basis points to 7.75 per cent, overnight and one month tenors have been reduced by 15 bps, it said.
Canara Bank, which acquired Syndicate Bank on April 1, said the revised rates will be applicable for the amalgamated entity. After amalgamation, Canara Bank has become the fourth-largest state-owned bank by assets.
The rate cut came after the Reserve Bank of India (RBI) announced 75 bps cut in the repo rate on March 27 in order to mitigate economic risks associated with the coronavirus crisis. In its last monetary policy meet, RBI had cut repo rate by 75 bps to 4.4 per cent from 5.15 per cent. The reverse repo rate had also been reduced by 90 bps to 4 per cent in a bid to maintain financial stability and revive growth. The cash reserve ratio (CRR) of all banks reduced by 100 bps to 3 per cent of net demand and time liabilities (NDTL) with effect from fortnight beginning March 28, 2020 for a period of one year.
On the same day, State Bank of India, the country's largest lender, had cut its FD rates by up to 50 bps across various tenures.
On Friday, private lender ICICI Bank reduced interest rate on fixed deposits and savings account by up to 50 basis points (bps). The reduction in interest rates on savings accounts will be effective from April 9, while new rates on FDs became effective from April 3, 2020.
By Chitranjan Kumar