Indian Bank cuts 1-year MCLR by 5 bps to 7.3%; effective from September 3

All new retail loans (housing, education, vehicle), credit to MSMEs are linked to RLLR now.

State-owned lender Indian Bank on Tuesday announced a cut of 5 basis points in its marginal cost of funds based lending rate (MCLR) for one-year tenure.

The bank has decided to reduce the MCLR for one-year tenure by 5 basis points to 7.30 per cent effective from September 3, 2020, Indian Bank said in a regulatory filing.

Most of the consumer loans such as personal, auto and home were priced on the basis of the one-year MCLR prior to the introduction of repo-linked lending rate (RLLR).

All new retail loans (housing, education, vehicle), credit to MSMEs are linked to RLLR now.

From October last year, the Reserve Bank of India (RBI) had mandated banks to link all new floating rate personal or retail loans and floating rate loans to MSMEs to an external benchmark.

The RBI allowed banks to link their interest rates to repo rate or three-month or six-month treasury bill.

On Monday, the country's second largest lender Punjab National Bank (PNB) had raised its RLLR by 15 basis points to 6.80 per cent, making loans costlier for new borrowers.

However, PNB had slashed its base rate by 10 basis points to 8.80 per cent from 8.90 per cent.

The revised lending rates will be effective from September 1, 2020, it had said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel