After the State Bank of India (SBI) and Bank of Baroda (BOB), now Allahabad Bank has also cut its MCLR. The bank has announced a deduction of five basis points in MCLR. The bank has made this cut in MCLR for all periods. After the deduction, the new rates will come into effect from 14th February. This will now make home and auto loans cheaper. The asset-liability management committee of the bank has changed the existing MCLR and decided to reduce it by five basis points for all different MCLR periods, the bank said in regulatory finance. This will now increase the one-year benchmark MCLR to 8.25%, which is currently 8.30%. Most consumer loans like retail, automobiles, and personal loans are based on one-year MCLR.
Similarly, after the cut, the MCLR of three and six months has also come in the range of 7.75 to 8.10% after a five-point cut. There has been no change in the MCLR of one month. It is 7.85%. It may be recalled that the Reserve Bank of India had not made any change in the repo rate in its last monetary policy for the current financial year released on 6 February. Recently the Reserve Bank of India (RBI) had announced no change in the repo rate. The repo rate remains at 5.15 percent. But even then SBI has cut the MCLR. On Thursday, the central bank announced an announcement to promote the loan. RBI has given an exemption to banks to cut cash reserve ratio (CRR), which will remain in force till July 2020. The meeting said that more and more loans should be provided to small and medium scale industries. If required, banks can cut the ratio of their reserve funds.
HDFC had cut MCLR by up to 15 bps. According to the bank’s website, the new 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 cut by 15 bps. The new rate is 8.15 percent. Earlier 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.
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