Central Bank of India cuts MCLR across all tenors

The reduction in rates will be effective from August 15, 2019.

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After the Reserve Bank of India cut the repo rate by 35 basis points (bps) last week during its monetary policy review, many banks have started lowering lending rates. The most recent one is Central Bank of India. The bank announced on Wednesday that it has reduced its one-year marginal cost-based lending rate (MCLR) by 20 bps from 8.5 percent to 8.3 percent. This will be effective from August 15, 2019. It added that it has reduced rates across all other tenors as well.

Further the bank stated in its press release that it will come out with repo linked retail products. Pallav Mohapatra, MD & CEO said “the bank will come out with new products in the retail segments having repo linked interest rate, i.e., RLIR, during September 2019.”

Here is a look at the bank's MCLR with effect from August 15.


Tenor
MCLR as on July 15, 2019

MCLR from August 15, 2019

Overnight

8%

7.8%

1 Month

8.15%

7.95%

3 Month

8.25%

8.05%

6 Month

8.4%

8.2%

1 Year

8.5%

8.3%


Banks that have cut MCLR

The country's largest lender, State Bank of India (SBI) was the first to announce a 15 bps reduction in MCLR across all tenors within hours of RBI's policy announcement on August 7. IDBI Bank and Oriental Bank of Commerce lowered their rates by 5-10 bps while Bank of Baroda had announced a cut in MCLR by 15 bps on August 5. UCO Bank, Allahabad Bank and Canara Bank have also cut their MCLRs.

Banks that have announced repo linked products
SBI was also the first bank to announce that it will link its retail products to the repo rate back in May. Last week, Syndicate Bank said it has decided to link is deposits and loans to the repo rate for a wide range of products, its larger peers Bank of India, Union Bank and Allahabad Bank also said they are working on the modalities to launch similar products.
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