In a big relief to its customers, the Bank of Maharashtra has cut its lending rates by 25 basis points across tenors to 8.20 per cent from 8.45 per cent, with effect from October 8, 2019. The bank's decision comes a week after the RBI reduced the repo rate by 25 bps recently. This means that those shopping around for retail loans, including home loans, are in for a cheaper deal.
However, existing Bank of Maharashtra home loan customers may have to wait awhile to see an impact on their EMIs because of the reset clause. The interest rate of the loan for the borrower is changed only on the reset period, which is typically one year. So your loan rate will go down only after 12 months from the reset date.
The bank says the base has been kept unchanged. The revised marginal cost of funds based lending rates (MCLR) for overnight tenor stand at 8.05 per cent; 8.15 per cent for one month; 8.20 per cent for three months; 8.30 per cent for six months; and 8.40 per cent for one year.
India's largest lender State Bank of India announced yet another reduction in lending rates on Wednesday. The State Bank of India (SBI) cut its marginal cost of funds-based lending (MCLR) rate by 10 basis points (bps), effective October 10. This is the bank's sixth consecutive cut in MCLR in the current fiscal. The Monetary Policy Committee slashed the short-term lending rate for the fifth time in a row bringing it down to 5.15 per cent.