Money & Banking

ICICI Bank lowers MCLR by 10 bps

PTI Mumbai | Updated on September 04, 2019 Published on September 04, 2019

ICICI Bank, the second-largest private sector lender, has cut its lending rates by 0.10 per cent across all maturities, sources said on Wednesday. The rates have been cut across all tenors under the marginal cost of funds-based lending rate (MCLR) system, they said.

With this cut, which comes amid repeated RBI nudges to slash rates, the total quantum of rate reduction by the bank since April stands at 0.20 per cent.

Under the revised rates, effective September 1, the bank’s one-year MCLR will come down to 8.55 per cent, while the overnight MCLR will be 8.30 per cent.

The one-year MCLR is considered important from a retail loans perspective, as a bank’s long-term loans like home loans are linked to this rate.

Its larger rival HDFC Bank’s one-year MCLR stands at 8.60 per cent as of now, while the same for the third-largest private sector lender, Axis Bank, is at 8.55 per cent.

ICICI Bank had last reviewed its interest rates in the first week of July, when it effected a 0.05 per cent reduction.

The RBI has been disappointed with banks for not passing on the lower rates to borrowers, despite four successive rate cuts of 1.10 per cent in 2019 and 0.85 per cent since April.

According to the RBI, banks have passed on only under 0.30 per cent benefits to borrowers till August, against 0.75 per cent of its cuts. Banks say it takes time for its liabilities to get re-priced, which results in the delay in transmission of RBI’s moves.

Published on September 04, 2019
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