March 12, New Delhi: State-owned Union Bank of India (UBI) has cut the Marginal Cost of funds-based Lending Rates (MCLR) by 10 basis points (100 bps = 1 per cent) across all tenors effective from March 11, 2020 till March 31, 2020. This is the ninth consecutive rate cut announced by the bank since July 2019.
UBI’s one-year MCLR now stands at 8 per cent per annum, down from 8.10 per cent per annum. Here’s the latest MCLR rates offered by Union Bank of India:
Naveen Kukreja, CEO of Paisabazaar, said that UBI’s cut in the MCLR is in line with the prevalent falling interest regime. MCLR is the minimum lending interest rate which banks can lend.
“As banks set their MCLR primarily on the basis of their cost of funds, a steady decline in deposit rates is reducing their cost of funds and thereby reducing MCLR. The cut will benefit those borrowers who have their interest rate reset date till the next review of the bank’s MCLR. Other existing borrowers of UBI under the MCLR regime will continue to repay in the same lending rate," he said.
Currently, the Reserve Bank of India’s (RBI) policy repo rate stands at 5.15 per cent and reverse repo rate at 4.90 per cent. Recently, the State Bank of India (SBI) also announced MCLR rate cut by 10-15 basis points across all tenors. SBI’s one year MCLR comes down to 7.85 per cent per annum from 7.90 per cent per annum.