Bank of Baroda, UCO Bank, and Bank of India have also cut marginal cost of lending rate (MCLR) after HDFC, the largest private sector bank and State Bank of India (SBI), the country's largest government bank. Similarly, in December, five banks have gifted customers as the MCLR cuts will give customers a cheap loan. The government-owned Bank of Baroda has changed its various-term marginal cost-based lending rates (MCLR) by 20 basis points, or 0.20 percent. These rates will come into effect from 12th December. Bank of Baroda said in a statement that it has reduced its one-year MCLR by just 0.05 percent to 8.25 percent, which is linked to all retail loans. The bank has diminished it is overnight, and a one-month rate by 20 basis points to 7.65 percent. Bank of Baroda has reduced the MCLR for three months, and six months by 10 basis points to 7.80 percent, and 8.10 percent, respectively.
UCO Bank has cut its all-term MCLR by up to 10 basis points. With this, the bank's one-year MCLR declined from 8.40 percent to 8.30 percent. Also, MCLR with overnight, one month, three months, and six months duration has been reduced by 10 basis points. The current rates have come into impact from Tuesday.
Also, Bank of India has cut interest on one-day loans by 0.20%. Thus, the rate has gone up to 7.75 percent. The bank has reduced the interest rate by 0.10 percent on other term loans. Therefore, the bank will take an interest of 8.2 percent on one-year loans, which was earlier 8.3 percent. The new rates have come into effect with immediate effect.
Earlier, HDFC had cut MCLR by 15 bps. These rates have come into effect from 7th December 2019. The six-month MCLR has now gone up to eight percent after the cut. It has been cut by 10 bps. Earlier, the rate was 8.10 percent. The one-year MCLR has been reduced by 15 bps. The new rate is 8.15 percent. More previously, it was 8.30 percent. The MCLR for two years and three years has also been cut by 15 bps, followed by 8.25, and 8.35 percent, respectively.
SBI had announced a cut of 10 bps in a one-year MCLR. After this, the rate has come down from 8 percent to 7.90 percent. These new rates have come into effect from 10th December 2019. This will benefit the customers as they will now get a cheap loan. Earlier, in November, SBI had changed the MCLR. SBI then cut five bps in a one-year MCLR. The reduction in rates is too surprising as the RBI did not change its key policy rates in the recent bi-monthly monetary policy review. However, there is a sizeable scope for reduction in interest rates.
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