State-owned Canara Bank, Indian Bank and private sector Kotak Mahindra Bank cut lending rates by up to 0.1 per cent, following the 0.25 per cent repo rate cut by the RBI.

Canara Bank has effected downward revision in the base rate by 0.05 per cent to 9.60 per cent from 9.65 per cent, it said in a regulatory filing. The new rate would be effective from October 11, Canara Bank said.

Another state-owned lender Indian Bank has reduced marginal cost of funds based lending rate (MCLR) by up to 0.1 per cent.

For 1-year tenor loan, Indian Bank has reduced MCLR rate by 0.01 per cent from 9.45 per cent to 9.35 per cent, effective October 7.

For all other tenures, the rate of reduction is 0.05 per cent.

Private sector Kotak Mahindra Bank has reduced base rate by 0.1 per cent to 9.40 per cent from 9.50 per cent, it said in a statement.

It, however, has not cut the main marginal cost of funds based lending rate (MCLR) on which banks price their assets now. The cut in the base rate will help its existing borrowers as prior to this April. The MCLR framework came into being from April 1 this year.

“Our MCLR meeting will be held at the end of the month and the movement will be in the same direction,” Joint Managing Director Dipak Gupta told PTI, adding a bulk of its loan book is under the base rate system.

Another private sector lender Karur Vysya Bank announced reduced MCLR rate by 0.35 per cent on various maturities.

These lenders join others, including ICICI Bank and Syndicate Bank which have cut their rates.

RBI lowered the repo rate or the rate at which it lends to banks by 0.25 per cent.

The 6-member Monetary Policy Committee, which has three members nominated by the government and the rest from the Reserve Bank, lowered repo rate to 6.25 per cent from 6.50 per cent.

Source: The Financial Express