PNB, Allahabad Bank to cut MCLR, retail loans to be cheaper

Punjab National Bank (PNB) and Allahabad Bank will reduce benchmark marginal cost of funds based lending rate (MCLR) by 10 basis points (bps) across various tenures from March 1.

The reduction will make home, car and other retail loans cheaper.

According to the PNB, the reduction is applicable to all the tenures overnight, one month, three-months, six-month, one-year and three years.

Similarly, state-run Allahabad Bank said it will cut MCLR across all tenures up to three years with effect from March 1. 

"The Asset Liability Management Committee of the bank has reviewed the MCLRs and decided to go for a downward revision by 10 bps for all tenures," Allahabad Bank said in a regulatory filing.

For all the tenures overnight, one-month, three-month, six-month, one-year, two-year and three years the bank has cut the MCLR by 0.10 percent each to 8.15 percent, 8.25 percent, 8.45 percent, 8.50 percent, 8.65 percent, 8.85 percent, and 8.95 percent, respectively, according to the regulatory filing.

Last week, the Reserve Bank of India (RBI) had asked lenders to transmit the repo rate cut benefit to the real economy after a 25 bps rate cut by the apex bank in early February.

A basis point is one-hundredth of a percent.

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