Bandhan Bank cuts lending rate for small borrowers to 10.52%

Bandhan Bank will now charge its micro borrowers interest at 18.52% a year, down from 19.90%

Kolkata-based Bandhan Bank on Monday said it has cut its Marginal Cost of funds-based Lending Rate or MCLR by 148 basis points to 10.52 per cent per annum. The decision was taken at the meeting of the bank's Asset Liability Committee.

One basis point is one-hundredth of a percentage point.

The new rate takes effect from Tuesday, January 3. Following this, Bandhan Bank will now charge its micro borrowers (those with loans up to Rs 1 lakh) at 18.52 per cent per annum, down from 19.90 per cent. With this, the bank has cut its loan rate for small borrowers by almost 4 percentage points since it started operations in August 2015.

"We will continue to pass on the benefit of lower cost of funds to our borrowers," Chandra Shekhar Ghosh, managing director and CEO of Bandhan Bank said in a statement.

"Our deposit portfolio has risen to Rs 19,000 crore and 27 per cent of this is current and savings accounts (CASA)," he said adding, "We are always sensitive to the needs of the poor, lower middle class and middle class borrowers."

Small borrowers account for 95 per cent of the bank's Rs 18,500 crore credit portfolio.

The Kolkata-headquartered bank has two divisions -- general banking and micro-banking, offering a suite of retail financial solutions, including a variety of savings and loan products. Currently, the savings bank account interest rate is 6 per cent per annum for balance above Rs 1 lakh and 4.25 per cent per annum for balance up to Rs 1 lakh. For term deposits, the maximum interest rate offered is 8 per cent for one year with an additional 0.5 per cent for senior citizens.

Currently, Bandhan Bank operates across 32 Indian states and Union Territories through a network of 760 branches, 2,416 Doorstep Service Centres and 270 ATMs. Its more than 9.8 million customers are being served by a dedicated team of 23,000 employees.