After SBI cuts MCLR by 5 bps, this bank wields the knife too, cuts 10 bps

A day after country's largest lender State Bank of India (SBI) reduced its MCLR by 5 bps, state-owned Oriental Bank of Commerce (OBC) has cut the marginal cost of funds-based lending rate (MCLR) on Wednesday by up to 10 basis points (bps) for various tenors with effect from Thursday. The bank has also reduced MCLR for overnight and one-month loan tenor by 10 bps to 8.20 per cent and 8.25 per cent, respectively. Earlier, MCLR for overnight and one-month tenor was 8.30 per cent and 8.35 per cent, respectively.

The bank has also reduced MCLR for three-month, six-month and one-year tenor loans by 5 bps to 8.45 per cent, 8.55 per cent and 8.65 per cent, respectively. Earlier, MCLR for three-month, six-month and one-year tenor loans were at 8.50 per cent, 8.60 per cent and 8.70 per cent, respectively. "This is to inform that the bank has revised MCLR for different tenors with effect from July 11," the bank said in a regulatory filing on Wednesday.

This comes after RBI Governor Shaktikanta Das, earlier this week, had said that he expects faster transmission of the three successive repo rate cuts totalling 75 basis points. On Tuesday, the State Bank of India had lowered its lending rates by 5 basis points across all tenors. After the decision, interest rates on all loans linked to MCLR stand reduced by 5 bps with effect from July 10, 2019. This was the third cut by the bank in this financial year. With the latest cut, the reduction in the Home Loan Rates since April 10, 2019 is 20 bps.

After the 25 bps repo rate cut in the Monetary Policy review held in June, Bank of Maharashtra, Corporation Bank and IDBI Bank had reduced their MCLR by 5-10 bps. The next meeting of the monetary policy committee is scheduled for August 5-9, when the majority of analysts expect another rate cut.

Banks review MCLR every month.