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Following the revision, the one-year MCLR - a key benchmark for many loans including home loans - now stands at 8.85%, compared with 8.90% earlier.
Indian Overseas Bank on Thursday said it cut its marginal cost of funds-based lending rates (MCLR) by 5 basis points (bps) for overnight, one-year, two-year and three-year tenures, effective Sept 15.
Following the revision, the one-year MCLR - a key benchmark for many loans including home loans - now stands at 8.85%, compared with 8.90% earlier.
The overnight MCLR stands at 8.00%, two-year MCLR at 8.85%, and the three-year MCLR at 8.90%.
The state-owned lender kept its one-month, three-month and six-month MCLRs unchanged at 8.30%, 8.45% and 8.70%, respectively.
What is MCLR and why it matters
MCLR is the minimum interest rate below which a bank cannot lend, except in certain cases allowed by the Reserve Bank of India. It is revised periodically and is linked to a bank’s funding cost.
A cut in MCLR typically lowers the cost of borrowing for customers with floating rate loans, as their EMIs may reduce when the new rate becomes effective.
Also Read: Bank of Baroda slashes lending rates for these tenures: Check details here
