Private lender DCB Bank today reduced both base rate or the minimum lending rate and the marginal cost of funds-based lending rate (MCLR), a move which will lower EMIs for its borrowers.
While MCLR has been reduced by up to 0.5 per cent, the base rate has been cut by 0.06 per cent.
MCLR for overnight lending has been slashed by 0.5 per cent to 9.32 per cent while it has been lowered by 0.2 per cent to 9.72 per cent effective May 4, DCB Bank said in a statement.
MCLR rate for other maturities has been left unchanged, it said.
DCB Bank revised its base rate to 10.64 per cent per annum from the earlier base rate of 10.70 per cent, effective May 4.
RBI had asked banks to price fixed rate loans of up to three years based on marginal cost of funds from April 1.
The lending rate based on marginal cost of funds is lower than base rate in some cases, resulting in lower EMIs for borrowers. Most banks earlier decided lending rates based on their average cost of funds.