Union Bank of India also said that it expects MCLR to ease by 15 basis points going ahead. It plans to link its home and auto loan portfolios to RBI's repo rate, as against MCLR presently.
State-run lender Bank of India said it will cut its one-year marginal cost-based lending rate (MCLR) by 25 basis points to 8.35 percent from August 10.
"MCLR for other tenors have also been reduced. We have similar guidance for the coming months as well when we will endeavour to pass on the benefits of rate cuts," the lender said in a statement.
Union Bank of India also said it expects MCLR to ease by 15 basis points going ahead. The bank reduced its MCLR by up to 20 basis points earlier this month. Its one-year MCLR stands at 8.5 percent.
Union Bank of India is also planning to link its home and auto loan portfolios to RBI's repo rate, as against MCLR currently. The move will ensure better transmission of policy rates, the bank said in a statement. As on June 30, nearly half of its Rs 57,735 crore retail loan portfolio comprised of home loans, while 7.2 percent came from vehicle loans.
The move comes after the Reserve Bank of India (RBI) cut its key policy rate by 35 basis points to 5.4 percent on August 7. This was the fourth consecutive rate cut since February.
The banking regulator said lenders have passed on only 29 basis points of rate cuts to consumers, as against its cumulative reduction of 75 basis points in past policy reviews. RBI Governor Shaktikanta Das said the regulator created an enabling environment to ensure credit flow to needy sectors and the banking system was flush with liquidity.
Punjab National Bank cut its MCLR by 10 basis points across tenors on August 1. Its one-year MCLR stands at 8.3 percent. Bank of Baroda also cut its MCLR by 15 basis points across tenors on August 7. Its one-year MCLR is at 8.45 percent. The country's largest lender, State Bank of India also reduced its MCLR by 15 basis points across tenors from August 10.
Allahabad Bank has also decided to cut its MCLR by 15-20 basis points across tenors from August 14, the bank said in a statement.Among private lenders, HDFC Bank reduced its MCLR by 10 basis points across tenors on August 7, while ICICI Bank and Yes Bank have left their MCLR unchanged this month.The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .