Union Bank of India Monday announced a cut in its marginal cost of funds –based lending rate (MCLR) by up to 15 basis points across various tenors, it becomes effective on August 11. The overnight MCLR rate at 6.80 percent while three-month and six-month rates have been revised to 6.95 percent and 7.10 percent, respectively.
The marginal Cost of Funds based Lending Rate (MCLR) is the low lending rate below which a bank is not permitted to lend. RBI has the right to give authorization for the same in exceptional cases.
One year MCLR reduced by the lender from 7.40 to 7.2 release said. This is the fourteenth consecutive slashes made on MCLR announced by the bank since July 2019, the release said. IBO changed its MCLR. It reduced the rate on loans linked to MCLR by 10 basis points across all tenors effective August 10. Loans linked to MCLR will become cheaper. The bank had also decreased its interest rate on loans linked to base rate by 10 basis points from 9.45 percent to 9.35 percent per annum.
Two years of MCLR has been reduced from7.75 percent to 7.65 percent. Last week IOB informed that one-year MCLR has been reduced to 7.65 % from 7.75 %. It reduced its overnight rate to 6.80 percent from 7 percent earlier and one-month MCLR to 6.90 percent from 7.10 percent. Indian overseas Bank revises MCLR rates monthly and benchmarks its interest rates for a home loan and other loans to MCLR rates of a different tenor.
The Pune –based bank announced its marginal cost reduction in funds based lending rates among all tenors by 10 basis points from Thursday. Last month, the bank cuts its MCLR by up to 25 bps across all tenors. Pune based lender’s fifth consecutive MCLR cut was this. Besides MCLR, on bank loans, the bank has also cut its interest rate which offered to farmers and retail customers.
At overnight it had cut the rate to 6.80 percent 7 percent earlier and one-month MCLR changed to 6.90 percent from 7.10 percent.