Dena Bank cuts lending rate by 0.75 percent

By: | Updated: May 29, 2017 6:36 PM

Public sector lender Dena bank today slashed its benchmark lending rate by 0.75 per cent, in the footsteps of bigger lenders like State Bank of India and Punjab National Bank.

Dena bank has reduced marginal cost of funds based lending rate (MCLR) by 0.75 per cent to 8.55 per cent for 1 year tenor, the bank said in a statement. (Reuters)Dena bank has reduced marginal cost of funds based lending rate (MCLR) by 0.75 per cent to 8.55 per cent for 1 year tenor, the bank said in a statement. (Reuters)

Public sector lender Dena bank today slashed its benchmark lending rate by 0.75 per cent, in the footsteps of bigger lenders like State Bank of India and Punjab National Bank. Dena bank has reduced marginal cost of funds based lending rate (MCLR) by 0.75 per cent to 8.55 per cent for 1 year tenor, the bank said in a statement. With the reduction in benchmark rate, home, car and other loans linked to MCLR would become cheaper.

Yesterday, the country’s largest lender SBI along with PNB and Union Bank of India, slashed lending rates by up to 0.9 per cent. Following the reduction, lending rate of SBI for a one-year loan has came down to 8 per cent from 8.90 per cent.

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Banks are flush with deposits following demonetisation.

Banks have switched to MCLR as their new benchmark lending rate from June last year, 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.

MCLR 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. MCLR rates are revised every month. PTI DP Dena Bank cuts lending rate by 0.75%
New Delhi, Jan 2 (PTI) Public sector lender Dena bank today slashed its benchmark lending rate by 0.75 per cent, in the footsteps of bigger lenders like State Bank of India and Punjab National Bank.

Dena bank has reduced marginal cost of funds based lending rate (MCLR) by 0.75 per cent to 8.55 per cent for 1 year tenor, the bank said in a statement.

With the reduction in benchmark rate, home, car and other loans linked to MCLR would become cheaper.

Yesterday, the country’s largest lender SBI along with PNB and Union Bank of India, slashed lending rates by up to 0.9 per cent.

Following the reduction, lending rate of SBI for a one-year loan has came down to 8 per cent from 8.90 per cent.

Banks are flush with deposits following demonetisation.

Banks have switched to MCLR as their new benchmark lending rate from June last year, 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.

MCLR 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. MCLR rates are revised every month.

Private sector Kotak Mahindra Bank too reduced the MCLR rate by upto 0.45 per cent. The bank has reduced MCLR by 0.20 per cent to 9 per cent from 9.20 per cent for 1-year tenor, Kotak Mahindra Bank said in a statement. However, MCLR for three-month period has been reduced by 0.45 percentage points to 8.40 per cent while lending rate for 2 and 3 years has been brought down to 9 per cent from 9.25 per cent.

Meanwhile, DHFL CEO Harshil Mehta said the company has always been at the forefront when it comes to passing the benefit of the rate cut to end-customer. “We are closely watching the situation and will promptly pass on the benefit of exemption of MCLR to end customer as part of our commitment to transform lives of Lower Middle Income segment by enabling access to home ownership,” he said.

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