Suddenly there is a competition for cheap loans in banks. It was started by the State Bank of India, ie SBI. SBI had yesterday, on Monday itself, announced a 10 basis point reduction in its rates associated with Marginal Cost Based Lending Rate (MCLR). There are 100 basis points in one percent. When SBI made its loan cheaper, it is believed that other banks will also make their loan cheaper. The same happened later. HDFC Bank and Bank of India, the largest private sector banks, also announced to make loans related to their Marginal Cost Based Lending Rate (MCLR) cheaper.
RBI Did Not Reduce Repo Rate
The RBI did not reduce the repo rate in its monetary policy review on the 5th, but had predicted that banks had room to make loans cheaper. And this has started happening within a few days.
HDFC Bank Reduced Interest on Debt
HDFC Bank, the country’s largest private bank, has made its loan cheaper. The bank has announced a reduction of 15 basis points in its Marginal Cost Based Lending Rate (MCLR). One percent has 100 basis points. Reduced interest rates have been applied to the loan. The bank had earlier reduced the lending rates by 10 basis points in the previous month. After this, all the loans related to MCLR have become cheap. This includes everything from home loans to auto loans.
Bank of India Made Loans Even Cheaper
Bank of India has announced a 20 basis point reduction in its loan rate. Now all the loans related to the bank’s marginal cost based lending rate (MCLR) will become cheap by 20 basis points. There are 100 basis points in 1 percent. Reduced interest rates have been applied to the loan. The bank’s one-year MCLR has now come down from 8.30 per cent to 8.20 per cent. After this, all the loans related to MCLR have become cheap. This includes everything from home loans to auto loans.
SBI Has Already Reduced Loan Rates
SBI has made its loan even cheaper. On Monday, SBI reduced the MCLR rate on its loan by 0.10%. After this, the bank’s loan linked to MCLR has become cheaper. SBI has cut the Marginal Cost of Lending Rate (MCLR) for the eighth consecutive time in the current financial year. A statement issued by the bank said that a reduction of 10 basis points or 0.10 per cent in MCLR will be valid for all periods.