Mumbai: Nudged by the regulator and government, more state-run lenders Friday joined their larger peer SBI to slash lending rates with lenders like Bank of India, Syndicate, Andhra, IOB, and Canara among others announcing 10-30 bps reduction in their loan pricing.
City-based Bank of India said its one-year lending rate has been reduced to 8.35 per cent from 8.60 per cent, effective August 10.
The bank said its MCLR under the one-year tenor, where more than 80 per cent of its loan book sits, will come down by 25 bps, effective August 10.
With this, 35 bps will get transmitted to the borrowers this year, it said, adding it has also reduced its lending rates for other tenors.
Andhra Bank reduced its rates up to 25 bps across tenors, effective August 16. Its one-year rate has been cut by 25 basis points to 8.45 per cent.
Another state-run lender Syndicate Bank reduced its one year loan pricing to 8.35 percent from 8.60 percent, effective August 12.
During the current financial year, the bank has cumulatively reduced its rates in different tenors up to 50 basis points.
The Kolkata-based Allahabad Bank has cut its rates by 15-20 bps across all tenors effective from August 14. The revised rates for one-year loans is set at 8.40 per cent from 8.55 per cent.
Another leasing state-owned bank Union Bank said it is looking at the current liquidity and interest rate scenario, it expects its rates to further soften up to 15 bps.
BoI said it is working out the modalities to offer repo linked lending rate to select customer segments, including personal loans.
Union Bank said it will soon link its housing and vehicle loan portfolio to repo rate from the current rates.
Syndicate Bank has also decided to introduce repo linked deposit rate and repo linked lending rate in a wide range of its products.
Housing loans, vehicle loans and consumer loans will now be offered at a repo linked rates basis. With the change, the housing loans of Syndicate will start from repo plus 2.90 per cent that is 8.30 per cent.
The saving bank deposits over Rs 25 lakh will be based on repo-linked rate, Syndicate said.
Chennai-based Indian Overseas Bank, has also reduced its rates by 15 bps in one year and above tenors and 10 bps in below one-year tenors with effect from August 10.
The Bengaluru-based Canara Bank too decided to pass on the benefit of reduction in interest rates by the RBI and has cut its loan pricing by 10 bps across all tenors, effective August 7.
With this revision, Canara Bank has cumulatively reduced its loan rates by 20 bps during the last six months and thus, one-year rates has come down to 8.50 per cent from 8.70 per cent earlier.
The rate cut follows a rate cut by the largest lender SBI post the RBI's decision to reduce the key repo rates by 0.35 percentage point to a nine-year low of 5.40 per cent.