Bank of India reduces the lending rate by 75bps

Bank of India (BoI), today, said it has reduced the lending rate linked to external benchmark by 75 basis points (bps), to 7.25 per cent, effective April 1. The lender's external benchmark lending rate is linked to the RBI's repo rate, which was reduced by 75 basis points, to 4.40 per cent, on March 27.

It has also cut benchmark marginal cost of funds based lending rate by 25 basis points across tenors from one year to one month, and by 15 basis points for overnight tenor. The one-year marginal cost of funds is now 7.95 per cent per annum.

Earlier other banks, like State Bank of India (SBI) and Union Bank of India, have also reduced their MCLR for one year. SBI had cut the MCLR by 10-15 bps across tenors effective from March 10, 2020. SBI on Friday said that it has decided to pass on the entire 75 basis points repo rate cut announced by the Reserve Bank of India. The new rates to be effective from April 1, 2020, will be applicable for its borrowers availing loans based on External Benchmark-linked lending rate, EBR and Repo-Linked Lending Rate, RLLR. The bank said in a statement that equated-monthly instalments on eligible home loan accounts, linked to EBR or RLLR will get cheaper by around 52 rupees per one lakh rupees on a 30-year loan.

Similarly, Union Bank of India announced 10 bps cut in MCLR from March 11, 2020. Importantly, as in February 2020, the median one year MCLR of public lenders has declined from 8.75 per cent since February 2019 to 8.20 per cent while for private banks, the figure slashed to 9.10 per cent to 9.28 per cent during the said period.