Punjab National Bank (PNB) and Kotak Mahindra Bank (KMB) on Thursday slashed their marginal cost of funds-based lending rates (MCLRs), a week after the Reserve Bank of India (RBI) governor Shaktikanta Das met bankers and nudged them to ensure better transmission of rate cuts. On Wednesday, Allahabad Bank was the first to announce a reduction in MCLRs by 10 basis points (bps) for all tenures up to three years. PNB reduced rates by 10 bps across tenures. Its one-year MCLR now stands at 8.45%. Rates for other tenures range between 8.05% and 8.65%. KMB reduced rates by 5 bps each for overnight, three-month, six-month and one-year borrowings. Its one-year MCLR is now 9%, while rates on other tenures range between 8.3% and 9.05%. After the RBI lowered the repo rate by 25 bps to 6.25% on February 7, only State Bank of India (SBI) had cut its interest rates on home loans by a meagre 5 bps. ALSO READ: Delhi-Mumbai flight fares surge amid Indo-Pak tension; check rates Banks review their MCLRs every month and revise them if there is a change in their cost of funds, among other variables. Das, in the previous week's meeting with bankers, is believed to have said that since monetary policy enunciations are based on specific calculations with respect to macroeconomic trends, he would expect better and quicker transmission. Bankers, on their part, had assured the governor that they would look at cutting rates. Earlier, the central bank had said banks must move to a pricing regime where interest rates for retail and MSME borrowers are priced based on an external benchmark by April 1, 2019. ALSO READ: Nobel Laureate Amartya Sen disses Ayushman Bharat, says Modi should focus on primary healthcare Even as the question of pricing loans based on external benchmarks such as the repo rate or T-Bill rates was discussed at the meeting, no conclusion was reached. Bankers said a separate meeting was likely to be scheduled to deliberate on the issue. Given that the discussion paper is in the public domain and the RBI is awaiting more feedback on the recommendations of the Janak Raj committee, the governor may want to wait before discussing it in detail, one of the bankers present at the meeting said.