Good News! PNB, Indian Overseas Bank, Union Bank of India cut MCLR; loans to get cheaper
State-owned banks Punjab National Bank (PNB) and Indian Overseas Bank on Tuesday announced reduction in their lending rates linked to the repo rate by 75 basis points, effective April 1. This follows last week's decision by the RBI to cut the repo rate by 75 bps.
Most of the public sector banks have passed on the benefit of the repo rate cut to their customers. "We have decided to pass on the full benefit of the recent RBI's policy rate cut of 75 bps to our borrowers covered under external benchmark-linked product of repo-linked lending rate (RLLR)," PNB said in a statement.
The cut is for retail and MSME borrowers, it said. Also, Chennai-based Indian Overseas Bank (IOB) also said it has reduced RLLR by 75 bps.
The new RLLR will come down from the existing level of 8 per cent to 7.25 per cent per annum from April 1. "Retail loans (housing, education, vehicle), loans to MSME, which are linked to RLLR, will now be available at cheaper rates," IOB said in a statement.
PNB also reduced their MCLR by 30 bps across tenors and will be applicable for the amalgamated entity. PNB is merging Oriental Bank of Commerce and United Bank of India with it from April 1. IOB also said it has reduced its one-year MCLR to 8.25 per cent from 8.45 per cent, effective from April 10.
Another public sector lender Union Bank of India said it has reduced its MCLR by 25 bps across all tenors. Its one-year MCLR will be revised to 7.75 per cent, down from 8 per cent from April 1.
The new benchmark rates will also be applicable to the customers of Andhra Bank and Corporation Bank, which will be amalgamated into Union Bank of India with effect from April 1. PNB also said it has further reduced its term deposit rates in various maturities bucket with maximum rate of 5.80 per cent for deposits maturing in one year and above.
