Indian Overseas Bank has cut the marginal cost of funds based lending rate (MCLR) by up to 0.30 per cent across all tenors. The move is expected to bring down interest rates on loans for borrowers. The benchmark one-year MCLR has been lowered by 0.20 per cent from June 10, Indian Overseas Bank (IOB) said on Sunday.
IOB slashed the interest rate on loans linked to MCLR by 30 basis points in overnight tenor and by 20 bps in one month to one year tenors. The loans linked to MCLR will become cheaper, the bank also said.
IOB said that the bank has also reduced its interest rate on loans linked to Repo Linked Lending rate (RLLR) from 7.25 per cent to 6.85 per cent per annum. Retail loans (housing, education, vehicle etc) and credit to micro, small and medium enterprises (MSMEs), which are linked to RLLR, will now be available at cheaper rates, it added.
A few days back, ICICI Bank cut the marginal-cost based lending rate (MCLR) on loans for all tenors. The private sector lender lowered rates by 0.05 per cent to make loans cheaper.The one-year MCLR, to which a majority of loans such as residential mortgages and auto loans are tied now stands at 7.70 per cent.
On March 27, State Bank of India (SBI) cut interest rates on fixed deposits (FDs) by up to 40 basis points (bps) across all tenors. The investors now earn 5.1 per cent interest on 1 year to less than 2 year deposits. Similarly, deposits of 3 years to less than 5 years will get 5.3 per cent and 5 years and up to 10 years will earn 5.4 per cent interest.