Union Bank Of India reduces MCLR by 20 BPS across all tenors: Here are the new rates

Two days after India’s largest lender, State Bank of India announced cut in MCLR, Union Bank of India has also announced a similar move. The bank on Friday announced a reduction in Marginal Cost of Funds. The bank said that it has decided to reduce the MCLR by 20 basis points across all tenors. 

After the latest rate cut, the one year MCLR of bank now stands at 7.40 per cent, down from 7.60 per cent. The revised MCLR will be effective from July 11, 2020. This is the thirteenth consecutive rate cut announced by the Bank since July 2019.

Revised MCLR, effective from 11th July, 2020 is as under:

Overnight MCLR - 6.85%

1 Month MCLR - 6.95%

3 Months MCLR - 7.10%

6 Months MCLR - 7.25%

1 year MCLR - 7.40%

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MCLR is Marginal Cost of Funds based Lending Rate and is an internal benchmark of the funds largely representing the cost of funds for a bank.

On Wednesday, the State Bank of India had announced another cut in its MCLR. The bank in a statement said that the MCLR will be reduced by 5-10 basis points in the shorter tenors i.e. up to 3 months. The new rates come into effect from July 10, 2020. However, the 1-year MCLR remains the same and hence this reduction will not impact home loan borrowers as such loans are linked to the 1-year MCLR of the bank. 

SBI said that the decision has been taken to boost credit off take and revive demand. This is 14th consecutive reduction in the Bank’s MCLR.

“With this revision, SBI’s MCLR upto 3 Months tenor comes down to 6.65% p.a., which is on par with the EBLR of SBI. SBI’s MCLR continues to be the lowest in the market. Details are being made available on the Bank’s web site,” the bank said in a statement.