Country’s second largest public sector Punjab National Bank (PNB) today cut benchmark lending rate by 0.05 per cent.
The new marginal cost of funds based lending rate (MCLR) will be effective from November 1, PNB said in a statement.
For overnight tenor it will be lower by 0.05 per cent to 9 per cent, for 3-months 9.15 per cent, one year term 9.25 per cent, three years 9.40 per cent and that for five years the MCLR is fixed at 9.55 per cent, it said.
Banks have moved to MCLR as its new benchmark lending rate from June, replacing the base rate system for new borrowers.
It is calculated on the marginal cost of borrowing and return on net worth for banks. It was introduced by RBI to ensure fair interest rates to borrowers as well as banks.
It also seeks to address the regulator’s primary objective of expediting monetary policy transmission along with augmenting uniformity and transparency in the calculation methodology of lending rates.
The MCLR rates are revised every month.