Banks cut MCLR rates after RBI nudges on transmission

Mumbai: A few days after the central bank nudged banks to cut lending rates, a host of lenders have announced a cut in their marginal cost of funds based lending rate (MCLR). Bank of Baroda, the second largest public sector bank, Union Bank of India and UCO Bank announced a cut in MCLR on Tuesday. Other banks such as State Bank of India, HDFC Bank and Bank of India have announced a reduction in their MCLR rates on Monday. A cut in MCLR makes old home loans and other retail loans linked to MCLR cheaper.

Bank of Baroda's one-year MCLR will be 8.25 per cent, 5 basis points (bps) below the exsisting level, effective December 12. There is a 20 basis points reduction in overnight and one-month MCLR from 7.85 percent to 7.65 percent and a 10 bps reduction in three months and six months MCLR from 7.90 percent to 7.80 percent and 8.20 percent to 8.10 per cent, respectively.

Similarly, Union Bank of India has cut one-year MCLR rate to 8.20 per cent, down 0.05 percentage point and reduced MCLR by 5-10 bps across all tenors.

UCO Bank has lowered its MCLR by 10 bps across tenors with effect from Tuesday. The revised one-year MCLR now stands at 8.30 per cent, down from 8.40 per cent.