UCO, Allahabad slash MCLR after RBI cuts repo rate

Days after the 35 bps repo rate cut by the Reserve Bank of India, state-run lenders Allahabad Bank and UCO Bank on Friday slashed marginal cost of funds- based lending rate (MCLR) across all tenors.

Allahabad Bank said it has reduced its MCLR by 15 to 20 basis points (bps) for different tenors, effective from August 14 while another public sector lender UCO Bank announced that it has cut the same by 15 bps across all tenors.

"The benchmark one-year MCLR has been reduced by 15 bps to 8.5 per cent as against 8.65 per cent earlier," UCO Bank said in a statement.

Also Read: RBI fines PNB, Allahabad Bank, UCO Bank, Corporation Bank for flouting KYC norms

The one-year MCLR is the rate based on which the retail loans such as home, car and personal advances are linked, the lender said. UCO Bank is planning to link the rate of interest with RBI repo rates, to pass on the benefit to customers.

Allahabad Bank also said it has decided to reduce the rate of interest on retail term deposits by 10 bps across all terms over one year.

Allahabad Bank's MD and CEO S.S.Mallikarjuna Rao said the bank will be exploring to develop products of both assets and liabilities linked with external benchmark to transmit the benefits of rate cut to its customers shortly.

Also Read: UCO Bank posts Rs 4,321.09 crore loss in FY19; scrip jumps 5%

Also Read: Allahabad Bank FY19 loss widens to Rs 8,457.38 crore on higher NPA provisions