Bank of Maharashtra cuts interest rate for home, car loans: Check new interest rates

In a move to provide financial relief to its customers, the state-owned Bank of Maharashtra (BoM) on Saturday announced a reduction in its interest rates on home and car loans, in effect from Monday, August 14, 2023.

Bank of Maharashtra (BoM) slashed the interest rates on home and car loans by up to 20 basis points (bps). The bank also announced a waiver on the processing fee. According to the lender, the move aims to provide financial relief to customers and foster their financial journey.

Starting August 14, 2023, the Bank of Maharashtra's adjusted home loan interest rate will be 8.5 per cent, down from the current rate of 8.6 per cent, the bank said in a release. The interest rate for car loans has been reduced by 20 basis points to 8.7 per cent.

Bank of Maharashtra said that this combination of reduced interest rates and waived processing fees for home and car loans demonstrates the bank's dedication to easing the financial load on customers and bolstering their financial progress.

Earlier, the bank waived processing fees for other retail schemes like education loans and gold loans as part of its UDAAN initiative.

Bank of Maharashtra’s interest rate revision comes after Reserve Bank of India kept repo rate unchanged at 6.5 per cent. 

The RBI Monetary Policy Committee (MPC) on Thursday, August 10, announced to keep the policy rate unchanged at 6.5 per cent. This was the third time in a row that the RBI opted to maintain the status quo on repo rate.

Banks revise MCLR

On Friday, in a stock exchange filing, Bank of Maharashtra shared its revised Marginal Cost of Funds based Lending Rate (MCLR), which will be effective from August 10, 2023. The public sector bank increased its MCLR by 10 basis points. Bank of Maharashtra's one-year MCLR is now 8.6 per cent, which previously stood at 8.5 per cent. The revised MCLR comes into effect from August 10, 2023.

Another public sector lender, Bank of Baroda also revised its one-year MCLR to 8.7 per cent, a marginal increase from the existing rate of 8.65 per cent, with effect from August 12.

On the other hand, Canara Bank raised its MCLR by 5 basis points to 8.7 per cent, effective from August 12.

Banks determine their minimum interest rate based on factors like cost of funds, operating costs, and profit margin. MCLR is used as a standard formula to calculate the interest rate on various loans.