Allahabad Bank to reduce MCLR by 0.10% across all tenors from March 1

A day after its release from the Prompt Corrective Action (PCA) framework, state-run Allahabad Bank on Wednesday said it will cut marginal cost of funds based lending rates (MCLR) across all tenors up to three years with effect from March 1, which will result in its home, car and other retail loans getting cheaper.

"The Asset Liability Management Committee of the bank has reviewed the existing Marginal Cost of Funds Based Lending Rates (MCLRs) and decided for a downward revision of MCLR by 10 basis points (bps) for all the tenors," the bank said in a regulatory filing.

For all the tenors - overnight, one month, three months, six months, one year, two years and three years, the bank has cut the MCLR by 0.10 per cent each to 8.15 per cent, 8.25 per cent, 8.45 per cent, 8.50 per cent, 8.65 per cent, 8.85 per cent and 8.95 per cent respectively, according to the filing.

The Reserve Bank of India last week had asked banks to transmit the repo rate cut benefit to the real economy after a 25 basis points rate cut by the apex bank in early February.

The apex bank on Tuesday decided to release Allahabad Bank, Corporation Bank and Dhanlaxmi Bank from its PCA framework.

On Wednesday, Allahabad Bank`s scrip jumped 7.53 per cent at Rs 47.15 at the closing on the BSE.

The bank narrowed net loss to Rs 732.81 crore for the third quarter of the current fiscal against a net loss of Rs 1,263.79 crore for the same period last fiscal.

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It had reported a net loss of Rs 1,822.71 crore for the second quarter of the current fiscal.