State-owned Bank of Baroda on Thursday cut the marginal cost of funds based lending rate (MCLR) by 0.15 per cent across tenors and also trimmed term deposit rates on select maturities. The reduction in MCLRs will bring down the interest on consumer loans, including personal, auto and housing. The one-year MCLR – the benchmark for most of consumer loans – has been cut to 8 per cent from 8.15 per cent, the bank said in a statement.
Among other tenors, the MCLRs from overnight to six month loans have been cut by 0.15 per cent each in the range of 7.40-7.85 per cent. The bank said the new MCLRs will come to effect from April 12, 2020. It has also reduced the interest rates for domestic term deposits, including NRO, NRE and Non-Callable for deposits below Rs 2 crore with effect from April 9, 2020, it said.
Non-callable term deposits are used to invest surplus funds for a long period wherein no premature withdrawal as well as overdraft facility is allowed among others. While, an NRE account is a bank account opened in India in the name of an NRI, to park his foreign earnings; whereas, an NRO account is a bank account opened in India in the name of an NRI to manage the income earned in India.
“The overall interest has reduced from 5.90 per cent to 5.70 per cent for 5 to 10 years and from 4.25 per cent to 3.50 per cent for deposits of 7 to 14 days, ” it added.
Bank of Baroda said it will continue to pay an additional interest of 0.50 per cent on domestic term deposits of less than Rs 2 crore for senior citizens for all tenures in terms of extant guidelines. Senior citizen residents in India are eligible for additional interest of 1 per cent per annum (i.e. 1 per cent normal staff privilege plus 0.50 per cent as a benefit to senior citizen) on fresh term deposits and renewals of existing resident term deposits of less than Rs 2 crore for maturities from 15 days to 10 years, said the lender.
Earlier this week, the country’s largest lender SBI had announced to cut the savings deposit rate and MCLRs by 0.25 per cent and 0.35 per cent, respectively.