Bank of Baroda lowers MCLR by upto 20 bps

Following the footsteps of peers like SBI, HDFC Bank and Bank of India, the second-largest state lender Bank of Baroda has reduced its marginal cost of funds-based lending rates (MCLR) by up to 20 basis points across tenors. The new rate will be effective from December 12.

The public sector lender has reduced its one-year MCLR, to which all retail loans are linked to, by 5 basis points to 8.25%. Its overnight and one-month rates are down 20 basis points to 7.65% now. It has also reduced by 10 basis points its three-month and six-month MCLR to 7.80% and 8.10%, respectively.

Bank of Baroda’s MCLR cut comes after the Monetary Policy Committee (MPC) of Reserve Bank of India (RBI) posted a surprise in bimonthly policy and maintained status quo on key policy benchmark repo rate after five successive rate cuts. However, MPC urged for reduction in lending rates by banks. The committee said that the median-term deposit rate has declined by 47 basis points during February-November 2019. Moreover, the weighted average term-deposit rate declined by 9 bps in October against a decline of just 7 bps in eight months during February-September. “This augur well for transmission to lending rates, going forward,” the MPC said in its statement.

Earlier on Monday, SBI cut its one-year MCLR by 10 basis points to 7.9%, HDFC Bank effected a 15-basis-point cut to 8.15%, and Bank of India reduced the same by 20 basis points to 8.20%.

Union Bank of India reduces MCLR by 5-10 bps
Union Bank of India has also reduced MCLR by 5-10 basis points across all tenors. The one-year MCLR of the bank now stands at 8.20%, down from 8.25% earlier. The overnight MCLR has been reduced by 10 bps to 7.75%. The revised MCLR will be effective from December 11.