More Public Sector Banks Join SBI In Cutting Lending Rates By 10-30 Basis Points
Nudged by the regulator and government, more state-run lenders on Friday joined their larger peer the State Bank of India to slash lending rates with lenders like Bank of India, Syndicate Bank, Andhra Bank, Indian Overseas Bank, and Canara Bank among others announcing 10-30 basis points reduction in their loan pricing.
The Bank of India said its one-year lending rate has been reduced to 8.35 percent from 8.60 percent, effective Aug. 10.
The bank said its MCLR under the one-year tenor, where more than 80 percent of its loan book sits, will come down by 25 basis points, effective Aug. 10.
With this, 35 basis points will get transmitted to the borrowers this year, it said, adding it has also reduced its lending rates for other tenors.
Andhra Bank reduced its rates up to 25 basis points across tenors, effective Aug. 16. Its one-year rate has been cut by 25 basis points to 8.45 percent.
Also read: Andhra Bank Cuts MCLR By 25 Basis Points
Another state-run lender Syndicate Bank reduced its one year loan pricing to 8.35 percent from 8.60 percent, effective Aug. 12.
During the current financial year, the bank has cumulatively reduced its rates in different tenors up to 50 basis points.
The Kolkata-based Allahabad Bank has cut its rates by 15-20 bps across all tenors effective from Aug. 14. The revised rates for one-year loans is set at 8.40 percent from 8.55 percent.
Another leasing state-owned bank Union Bank said it is looking at the current liquidity and interest rate scenario, it expects its rates to further soften up to 15 basis points.
Bank of India said it is working out the modalities to offer repo linked lending rate to select customer segments, including personal loans
Union Bank said it will soon link its housing and vehicle loan portfolio to repo rate from the current rates.
Syndicate Bank has also decided to introduce repo linked deposit rate and repo linked lending rate in a wide range of its products.
Housing loans, vehicle loans and consumer loans will now be offered at a repo linked rates basis. With the change, the housing loans of Syndicate will start from repo plus 2.90 percent that is 8.30 percent.
The saving bank deposits over Rs 25 lakh will be based on repo-linked rate, Syndicate said.
Chennai-based Indian Overseas Bank, has also reduced its rates by 15 basis points in one year and above tenors and 10 basis points in below one-year tenors with effect from Aug. 10.
The Bengaluru-based Canara Bank too decided to pass on the benefit of reduction in interest rates by the Reserve Bank of India and has cut its loan pricing by 10 basis points across all tenors, effective Aug. 7.
With this revision, Canara Bank has cumulatively reduced its loan rates by 20 basis points during the last six months and thus, one-year rates has come down to 8.50 percent from 8.70 percent earlier.
The rate cut follows a rate cut by the largest lender SBI post the RBI's decision to reduce the key repo rates by 0.35 percentage point to a nine-year low of 5.40 percent.