Union Bank of India cuts MCLR by up to 10 bps across tenors

Just a week after the Reserve Bank of India (RBI) maintained status quo on key rates in its bi-monthly monetary policy review, a slew of banks have announced reduction in loan rates. Tuesday evening, Union Bank of India announced that it has cut marginal cost of funds-based lending rates (MCLR) by 5-10 basis points (bps) across all tenors. After the cut, Union Bank of India's one year MCLR now stands at 8.2 percent, down from 8.25 percent. According to a press release issued by the bank, the new rates will be effective from 11 December, 2019.

Union Bank of India's MCLR with effect from 11 December, 2019

Tenor	MCLR (%)
Overnight MCLR	7.75
1-month MCLR	7.80
3-month MCLR	7.95
6-month MCLR	8.05
1-year MCLR	8.20

Source: Company website


Since the start of the week, many banks have announced reduction in MCLR. Monday saw the country's largest public sector lender, State Bank of India cut its one-year MCLR by 10 basis points, and the largest private sector bank, HDFC Bank reduce MCLR across tenors by up to 15 bps. Bank of India, too cut its MCLR. Tuesday, Bank of Baroda and UCO Bank announced interest rate cuts on loans.