Allahabad Bank has cut the marginal cost-based interest rate (MCLR) of 0.05% with different maturity periods. The revised rates will be effective from 14 February. The bank told the BSE that its Asset Responsibility Management Committee reviewed the existing MCLR and decided to cut it by 0.05% for all maturity periods.
The bank said that the MCLR of one year maturity period loans has come down from 8.30% to 8.25%. Similarly, the MCLR for one day, three months and six months have come down from 7.75% to 8.10%. The MCLR of loans with a maturity of one month is unchanged.
Earlier, State Bank of India has also cut MCLR by 0.05%. SBI has implemented the revised MCLR from 10 February itself. SBI has cut MCLR for the ninth time in a row. After this deduction, the MCLR of various maturity period loans has come down to 7.85%.
After SBI, Bank of Baroda (BOI) has also informed that MCLR has been reduced from 7.65% to 7.60% on loans with different maturities. In the Stock Exchange Filling, the bank has also stated that this new revision in MCLR will be implemented from 12 January 2020. With this, the MCLR has increased to 7.65% for one night, 7.60% for one month, 7.80% for three months, 8.10% for six months and 8.25% for one year in this bank.
Earlier, in January, the SBI had launched a unique scheme to revive the real estate sector, which is reeling under heavy depression. Under this scheme, if the homebuyers are unable to get possession of the house at the scheduled time, then the bank will return the entire principal amount to the customer. This refund scheme will be valid till the builder gets the occupation certificate.
This is not the first reduction in MCLR in the recent past. In December, SBI, BOI and private-sector HDFC Bank had cut the marginal cost-based interest rate of funds of various duration funds by 0.20%, which had made all types of loans cheap already.
In 2018, however, the rates fluctuated. In February that year, old home loans became cheaper with the RBI asking banks to link the base rate with MCLR, which was more sensitive to policy rate signals.
The very next month, the SBI and Punjab National Bank had raised their lending rates by up to 20 basis points, a move that increased the interest rates on existing as well as home, auto loans and personal loans.