Bank of Baroda and Bank of India just cut MCLR rate

State-owned Bank of Baroda today reduced the marginal cost of fund (MCLR) based interest rates by 0.10 percentage point across different tenors with effect from November 7.

"We wish to inform you that the bank has revised MCLR with effect from November 7, 2016," it said in a regulatory filing, according to news report by an agency.

For five years tenor, the new rate will be 9.45 per cent (9.55 per cent earlier); for three years and one year tenors it will be 9.25 per cent each.

Among other tenors, the lending rate for six months will be 9.20 per cent; three month 9.15 per cent, while overnight rate is fixed at 9 per cent.

MCLR is the new benchmark lending rate and replaces the base rate for new borrowers. It is calculated on the marginal cost of borrowing and return on nworth for banks.

It has been introduced in June by the Reserve Bank to ensure fair interest rates to borrowers as well as banks.

MCLR is expected to address RBIs primary objective of expediting monetary policy transmission along with augmenting uniformity and transparency in the calculation methodology of lending rates.

The MCLR rates are revised every month.

Bank of India has also revised its rates under different tenor. The new rates, it said will be applicable from Monday.