The economic condition of every household has deteriorated during the corona virus epidemic. Due to lack of income, people have to spend money from their savings. So many people are taking loans. Recently, the Reserve Bank of India (RBI) did not change the policy interest rates in the monetary policy review and the repo rate has been kept unchanged at four percent. But despite this, the public sector Bank of Baroda, Punjab National Bank and Canara Bank cut the marginal cost based interest rate (MCLR), so that people will get loans at cheaper rates.
- Bank Of Baroda
Public sector Bank of Baroda (BoB) said it has reduced its marginal cost of funds based interest rate (MCLR) by 0.05 per cent. BoB said in the information given to the stock exchange that the reduction in MCLR has been done at the rates of different periods. The new rates will come into effect from June 12, 2021. The MCLR has been revised to 7.35 per cent for a period of one year. The MCLR for the period of six months and three months has also been reduced by 0.05 per cent to 7.20 per cent and 7.10 per cent, respectively.
- Punjab National Bank
State-owned Punjab National Bank (PNB) has reduced the one-year marginal cost of funds based interest rate (MCLR) by 0.05 per cent to 7.30 per cent. The bank said in the information given to the stock exchange that the revised interest rate based on the marginal cost of the fund has come into effect from June 1, 2021. The MCLR has been cut by 0.10 per cent for a period of six months and three months and the interest rate after this cut will be 7 per cent and 6.80 per cent, respectively. There has been no change in the MCLR for a period of one day, one month and three years. - Canara Bank
Earlier, Canara Bank had changed the MCLR and Repo Linked Lending Rate (RLLR). The new rates have come into effect from May 7, 2021. The RLLR on home loan is 6.90 per cent for women and 6.95 per cent for others. The rate of loan used for agricultural work including four wheelers is 7.35 percent and for two wheelers it is 9.05 percent. It ranges from 6.90 per cent to 8.90 per cent under different schemes of education loan.
What is MCLR?
When a customer takes a loan from a bank, the minimum rate of interest charged by the bank is called the base rate. In place of this base rate, banks are now using MCLR, which is calculated on the basis of marginal cost of funds, term premium, operating expenses and cost of maintaining cash reserves ratio. Banking sector regulator Reserve Bank had introduced MCLR on the basis of marginal cost of lending in the country from April 1, 2016.
When a customer takes a loan from a bank, the minimum rate of interest charged by the bank is called the base rate. In place of this base rate, banks are now using MCLR, which is calculated on the basis of marginal cost of funds, term premium, operating expenses and cost of maintaining cash reserves ratio. Banking sector regulator Reserve Bank had introduced MCLR on the basis of marginal cost of lending in the country from April 1, 2016.
