Punjab National Bank has cut the marginal cost of funds based lending rate (MCLR) by 0.05-0.10 percentage points for December across maturities of various tenors. The bank has reduced the marginal cost of funds based lending rate with effect from December 1, 2016, it said in a regulatory filing. For a tenor of five years, the new MCLR is down by 0.05 per cent to 9.45 per cent. While that for three-years, one-year, six-month, three- month, one-month and overnight tenor it has been cut by 0.1 per cent each in range of 9.30 per cent to 8.90 per cent. Private sector lender South Indian Bank said, it has cut the MCLR in range of 0.05 to 0.3 per cent for a select maturity period. For a six month tenor, the lending rate will be 0.05 per cent lower at 9.45 per cent, while that for one month and overnight period it is cut by 0.3 per cent each to 9 and 9.05 per cent respectively. The three-month tenor MCLR will be down 0.25 per cent at 9.15 per cent for South Indian Bank. MCLR is the new benchmark lending rate replaced by RBI earlier this year. Calculated on the marginal cost of borrowing and return on net worth for banks, it has been introduced to ensure fair interest rates to borrowers as well as banks. The MCLR rates are revised every month.
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