IDBI Bank cuts MCLR by up to 35 bps

Moneycontrol BureauIDBI Bank reduced lending marginal cost of funds based lending rates (MCLR)  by up to 35 bps two days ahead of the RBI monetary policy review.In what is a second cut in a month’s time, the government-owned bank reduced MCLR by 30 bps-35 bps across various tenors with revised rates effective from February 1, 2017. A basis point (bp) is one hundredth of a percentage point.The bank’s one-year MCLR now stands at 8.20 percent, while one-year loans will be charged an interest rate of 8.80 percent, as against 9.15 percent earlier. The three-year loans will be offered at a minimum rate of 8.95 percent.“The reduction in MCLR is expected to positively impact loan growth; both in the retail consumer segment and corporate sector lending, thereby supporting the growth impulses in the economy,” IDBI Bank said in a statement.Just a month ago, the bank had cut its MCLR by 30 bps on the back of surplus liquidity due to influx of over Rs 15 lakh crore worth of deposits into the banking sector post demonetisation.The Reserve Bank of India is due to announce its monetary policy review on Wednesday, February 8. In a 50-50 chance, experts suggest that the RBI may cut key interest rate or the repo rate by 25 bps.Repo rate is the rate at which banks borrow short-term funds from RBI.