India's largest state-owned lender State Bank of India has cut lending rate by 5-10 basis points in the shorter tenors with effect from July 10. As per the bank, marginal cost-based lending rate or MCLR up to three months tenor has now been reduced to 6.65 per cent from 6.75 per cent earlier. The move will boost the loan demand amid the coronavirus crisis in India.
Yesterday, private lender HDFC Bank also reduced MCLR by 20 basis points across all tenors with effect from today. The current cut comes after 5 bps reduction in lending rates on loans last month. The latest overnight MCLR stands at 7.10 per cent; one month 7.15 per cent; three months 7.20 per cent; six months 7.30 per cent; one year 7.45 per cent; two years 7.55 per cent; and three years 7.65.
Other banks have also reduced their loan lending rates in view of the RBI's policy rate cut in the recent past; the central bank has cut repo rate by 115 bps since March.
State-run Canara Bank and Bank of Maharashtra on Monday also reduced marginal cost of funds based lending rates (MCLR) by 10 basis points and 20 basis points, respectively, across all tenors, effective from today.
Bengaluru-based Canara Bank cut its one-year MCLR to 7.55 per cent from 7.65 per cent earlier. Notably, most customers fall in the one-year loan category. Its overnight and one-month lending rates have been cut by 10 basis points to 7.20 per cent each. Three months MCLR rate has been revised to 7.45 per cent from 7.55 per cent.
In case of Bank of Maharashtra, one-year MCLR has been cut to 7.5 per cent. "The reduction in our MCLR is aimed to support economic growth and industrial development," BoM said in a release. Its overnight, one-month, three months and six month MCLR have been cut to 7 per cent, 7.10 per cent, 7.20 per cent and 7.30 per cent, respectively.