Allahabad Bank reduces MCLR

MCLR is a new methodology and benchmark introduced by RBI for setting lending rate by banks

Kolkata-based public sector lender Allahabad Bank, on Friday, announced reduction of its benchmark lending rate by 10 basis points at 8.50 per cent for one year and by 15 basis points at 8-8.40 per cent for a less than a year tenure.

In a statement, the bank said, with effect from June 12 this year, the marginal cost of funds based lending rate (MCLR) has been reduced implying that home, car and other types of loans linked to MCLR would become cheaper.

MCLR is a new methodology and benchmark introduced by the Reserve Bank of India for setting lending rate by banks. It has modified the existing methodology for setting lending rate i.e. base rate system from April 2016 onwards.