SBI and ICICI have cut lending rates
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Top two lenders in the country, Private sector lender ICICI Bank was the first to announce a cut of 0.10 per cent in its marginal cost of funds based lending rate (
Under the revised rates, the one-year MCLR which determined a slew of products including home loans for SBI stands at 8.90 per cent, while the same for ICICI Bank are at 8.95 per cent.
The revised rates are effective from November 1 in case of both the banks.
SBI has kept the overnight MCLR, which is the most aggressive offering, at 8.65 per cent, while the one month is at 8.75 per cent.
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The announcements come after repeated displeasure shown by the regulator for not passing on the benefits of cuts to borrowers and give a boost to the sagging economic growth. They also come ahead of the crucial "busy season" in the second half of the fiscal which sees a spurt in loan demand.
Under the revised rate structure, the one-year MCLR --- which is used for calculating the rate of interest on home loans -- will come down to 8.95 per cent.
The overnight and one-month MCLR will be 8.75 per cent, while the three-month MCLR has been fixed at 8.85 per cent and six months at 8.90 per cent.
The MCLR was introduced from April this year as a transparent and effective alternative by the RBI, after banks refused to pass on the benefits of its rate cuts to the borrowers.
Even after the introduction of the MCLR, the central bank continues to be concerned on the issue of transmission which was flagged by Governor
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"I agree that the transmission through bank lending has been less than anyone of us would have liked to,"
"We are hoping that over the next quarter or two, keeping in mind the government has also reduced the small savings rates, the MCLR itself will now throw up more transmission."
Since January 2015, the
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