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BOI And IDBI Bank Lower Lending Interest Rates

Olga Robert

Bank of India, as well as IDBI Bank, revised their MCLR for select tenures this week.

BOI lowered its marginal cost-based lending rate (MCLR) for the 6-month tenure by 5 basis points this week. However, it has kept the rates unchanged for the rest of the tenures.

The lender's six-month MCLR was reduced to 8.55 percent from the earlier 8.6 percent. The new rate will be effective from 10 April 2019. It had reduced its MCLR for one-year tenure, which most retail loan pricing is based on, by 5 basis points in March to 8.65 percent.

LIC-owned IDBI Bank also cut its lending rates by 5 basis points for most of the tenures with effect from 12 April.

In a statement on Thursday, the bank said that its one-year MCLR has been reduced to 9 percent. It revised six month and two-year MCLR now stands at 8.60 percent and 9.25 percent, respectively.

Further IDBI Bank has reduced its one-month lending rate by 10 basis points to 8.15 percent.

Banks have started reducing MCLR following a 25 basis point repo rate cut by the Reserve Bank in its first bi-monthly monetary policy review announced on 4 April. This is RBI's second consecutive cut in repo rate.

Other lenders like Bank of Maharashtra, State Bank of India and Kotak Mahindra Bank also recently announced a cut in the lending rates.

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