Bank of India on Sunday became the second bank to pass on the benefits of the latest repo rate cut by Reserve Bank of India after State Bank of India. The state-run lender told the stock exchanges that it has reduced the lending rate linked to external benchmark by 75 basis points (bps) to 7.25 per cent. The new rates will come into effect from April 1.
"The external benchmark lending rate has been reduced by 75 bps to 7.25 per cent per annum. With this, we have passed on the benefit of rate cut announced by RBI to our home, vehicle and MSME customers," PTI quoted a statement from the public sector bank.
Bank of India has also cut benchmark marginal cost of funds based lending rate (MCLR) by 25 bps across tenors from one year to one month, and by 15 bps for overnight tenor. The one-year MCLR is now 7.95 per cent per annum.
Bank of India has linked its external benchmark lending rate to the RBI's repo rate, which was reduced by 75 bps to 4.40 per cent in the bi-monthly Monetary Policy Committee meeting on March 27. The step was part of RBI's action plan to ease the economic burden of the coronavirus outbreak. Finance Minister Nirmala Sitharaman had emphasised on the need for quick transmission of the rate cut. State Bank of India had reduced its lending rates on the day of repo rate cut.
(With PTI inputs)