Lending Rates

Repo rate cut by 25 bps, stance still neutral; liquidity boost via ₹1 trn OMO in Dec

In the last three months, the WALR on fresh loans declined by 17 bps for the banking sector

Following the RBI's 100-bps policy rate cut, private banks showed faster transmission to lending rates, while PSBs led in passing on deposit rate reductions

RBI data shows lending rates on fresh and outstanding loans fell six bps in August, while the one-year median MCLR of banks stayed unchanged at 8.60 per cent in September

Private sector Karur Vysya Bank on Friday reduced the marginal cost of funds-based lending rate (MCLR) by 10 basis points (0.10 percentage points) across all tenors, making loans linked to the benchmark cheaper. The benchmark one-year tenor MCLR, which is used to price most consumer loans like auto and personal, will be at 9.45 per cent against the existing rate of 9.55 per cent, Karur Vsysa Bank said in a regulatory filing. Among others, the rate of one-month, three-month, and six-month tenors will be in the range of 9.30-9.45 per cent. The MCLR on overnight tenor will be 9.15 per cent against 9.25 per cent. The new MCLR of the bank will come into effect from September 7, it said. It is to be noted that the Reserve Bank of India (RBI) last month kept its benchmark lending rate unchanged at 5.5 per cent.

The move follows the central bank's decision last week to conduct a seven-day variable rate reverse repo auction worth Rs 1 trillion

Hours after RBI's jumbo rate cut, state-owned Punjab National Bank (PNB) on Friday announced up to 50 basis points reduction in lending rate, a move which will help existing and new borrowers. Other banks are also expected to make similar announcements soon. "Great News for Our Valued Customers! Punjab National Bank Makes Your EMIs More Affordable! Following the repo rate cut (6.00% - 5.50%), Punjab National Bank has reduced its RLLR by 50 bps, effective from June 9, 2025," PNB said in a post on X. With the reduction in the benchmark repo-linked benchmark lending rates (RBLR), the home loan of the bank will start from 7.45 per cent while vehicle loans from 7.8 per cent per annum. Earlier in the day, the Reserve Bank of India (RBI) cut interest rates by a larger-than-expected 50 basis points, and unexpectedly reduced the cash reserve ratio for banks to make available more money to lend in a bid to boost the economy. The RBI's six-member monetary policy committee, headed by Governor

Lending-deposit rate spread for banks dropped to 2.71 per cent in March, driven by lower lending rates amid reduced high-yield loan exposure and RBI rate cuts

RBI data suggest that during the tightening period, the transmission on fresh deposits and loans was higher for state-owned banks than for private sector banks

Local firms are fueling competition with global giants such Cerberus and Oaktree Capital Management

The one-year loan prime rate (LPR) was lowered by 25 basis points to 3.10 per cent from 3.35 per cent,

China surprised markets by cutting major short- and long-term interest rates in July, its first such broad move in almost a year, signalling policymakers' intent to strengthen economic growth

The Reserve Bank of India has warned lenders against "all forms of exuberance" due to worries about the rising risks

The one-year MCLR has risen to 8.85%, while the six-month and three-month MCLR rates have been increased to 8.65% and 8.45%, respectively

With the repricing of loans and higher lending rates for fresh loans, the net interest margins improved from a low of 1.89 per cent in Fy20

The state-owned lender is cost conscious and will not focus on top line alone, says K Satyanarayana Raju

The bank last week said it would cut 20,000 jobs over the next two years, after a fourth quarter marred by one-off charges that resulted in a $1.8 billion loss

The WALR on outstanding rupee loans of SCBs was at 9.80 per cent in November 2023 as against 9.84 per cent in October 2023 and 9.83 per cent in September

RBI released the Scheduled Banks' Statement of Position in India as of September 8, 2023

One year MCLR hiked to 8.7% with effect from Saturday