After RBI push, DCB Bank reduces MCLR, base rate

Private lender DCB Bank on Tuesday reduced both base rate or the minimum lending rate and the marginal cost of funds-based lending rate (MCLR), a move which will lower equated monthly installments (EMIs) for its borrowers.

While MCLR has been reduced by up to 0.5%, the base rate has been cut by 0.06%.

MCLR for overnight lending has been slashed by 0.5% to 9.32% while it has been lowered by 0.2% to 9.72% effective May 4, DCB Bank said in a statement.

MCLR rate for other maturities has been left unchanged, it said.

DCB Bank revised its base rate to 10.64% per annum from the earlier base rate of 10.70%, effective May 4.

The Reserve Bank of India (RBI) had asked banks to price fixed rate loans of up to three years based on marginal cost of funds from April 1.

The lending rate based on marginal cost of funds is lower than base rate in some cases, resulting in lower EMIs for borrowers. Most banks earlier decided lending rates based on their average cost of funds.

On Tuesday, the shares of DCB Bank closed up 1.79% or Rs 1.70 at Rs 96.85 per scrip on the Bombay Stock Exchange (BSE).