Lockdown in India: SBI, Indian Overseas Bank, Bank of Maharashtra cut lending rates

Lockdown in India: In the wake of COVID-19 lockdown in India hitting people's monthly budget to a larger extent, State Bank of India (SBI), Indian Overseas Bank (IOB) and Bank of Maharashtra have cut down their lending rates. SBI and IOB has slashed MCLR (Marginal Cost of funds based Lending Rate) by 15 bps and 10 bps respectively while the Bank of Maharashtra has slashed its MCLR by 10 bps. By this MCLR cut, SBI MCLR will become 7.25 per cent while IOB MCLR will become 8.15 per cent from 10th May 2020. While Bank of Maharashtra has already announced its MCLR rate cut earlier and from 7th May 2020 its new MCLR rate has become 7.90 per cent.

The one-year MCLR is the benchmark for most consumer loans, including personal, car and home. After this MCLR ate cut by these banks, existing home loan and other MCLR-linked loans will become cheaper. As per the SBI MCLR rate cut calculation, existing MCLR-linked SBI home loan EMI will become cheaper by near Rs 255 for a 30 year loan of Rs 25 lakh.

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"Our Bank has revised the MCLR w.e.f 10.05.2020 until further review," IOB said in a regulatory filing. IOB went on to add that the MCLR for the benchmark one-year tenor loan has been cut by 0.10 per cent to 8.15 per cent, with effect from May 10. Rates for other tenors, from three months to three years, have been reduced in the range of 0.05-0.10 per cent. No change has been made for overnight and one-month MCLR by the IOB.

As said earlier, Bank of Maharashtra reduced its MCLR by 10 bps to 7.9 per cent that became effective from 7th May 2020. In its filing to the exchange, the IOB said that the bank has said that under the RBI guidelines, the bank reviewed its lending rates and decided to cut its MCLR by 10 bps. however, for overnight to six-month tenor MCLRs, the IOB rates vary from 7.40 per cent to 7.70 per cent.

Meanwhile, Canara Bank has kept the MCLR unchanged, with the one-year benchmark standing at 7.85 per cent.