Allahabad Bank has cut its reference rate, MCLR, for various tenors by 0.05 per cent, which will be effective from December 1. The rates for one year MCLR has been slashed to 8.25 per cent from currently 8.3 per cent.
It said in a regulatory filing that the Asset Liability Management Committee (ALCO) of the bank has revised the existing Marginal Cost of Funds based Lending Rate (MCLR) and decided to reduce it for all the tenors by 5 basis points (0.05 per cent).
Banks review MCLR, the rate below which they can't lend, every month.
The new rates for overnight lending for one-six months and one-three years have been reduced by 0.05 per cent each in the range of 7.75-8.50 per cent, it said.
The ALCO also decided to reduce base rate and benchmark prime lending rate (BPLR) of the bank by 10 basis points (0.10 per cent) to 9.60 per cent and 13.85 per cent respectively, the bank said.
The MCLR, which is applicable to new borrowers, was introduced in April 2016 replacing the base rate system with the aim for a better transmission of RBI's monetary policy rate.