Bank of Baroda and HDFC Bank cut MCLR by 5 bps and 15 bps respectively

HDFC Bank had also cut its MCLR by 10 bps across tenures last month

Bank of Baroda, the country's second largest public sector bank, has reduced its benchmark lending rates, or the marginal cost of funds-based lending rates (MCLR) across various tenures.

Its one-year MCLR will be 8.25 per cent, 5 bps below the existing level. The latest interest rate cut will be effective December 12.

There is a 20 bps reduction in overnight and one-month MCLR from 7.85 per cent to 7.65 per cent and a 10 bps reduction in three-month and six-month MCLR, from 7.9 per cent to 7.8 per cent, and from 8.2 per cent to 8.1 per cent, respectively.

HDFC Bank has also reduced its loan rates across tenures by up to 15 basis points (bps). According to the bank’s website, the latest interest rate cut will be introduced on December 7. After the latest cut, six-month MCLR stands at 8 per cent (down by 10 bps), and one-year at 8.15 per cent (down 15 bps). The two-year rate will be 8.25 per cent and the three-year rate will be 8.35 per cent (both down 15 bps). The country's largest private sector bank cut its MCLR last month by 10 bps across tenures.

Union Bank of India’s one-year MCLR stands at 8.20 per cent. Its overnight MCLR has been reduced by 10 bps to 7.75 per cent. This will be effective from December 11.

The country’s largest public sector lender, State Bank of India (SBI), announced a 10 bps cut in its one-year MCLR, whereas Bank of India reduced its MCLR by 20 bps.

During the monetary policy press conference on December 5, Reserve Bank of India governor Shaktikanta Das said, “Although it (RBI) is not in a hurry to keep reducing interest rates, it would work to ensure that the transmission turns more effective since much needs to be passed on.”

He added that the RBI cut repo rate by 135 bps between February and October this year. Of this, 44 bps has been transmitted and the full impact on lending rates is still playing out.