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Oriental Bank of Commerce bank cuts MCLR rate upto 10 bps

Last Updated: July 11, 2019

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Oriental Bank of Commerce bank cuts MCLR rate upto 10 bps

Oriental Bank of Commerce bank cuts MCLR rate upto 10 bps

11 July 2019 Current Affairs: Oriental Bank of Commerce (OBC) has reduced the marginal cost of funds-based lending rate (MCLR) by up to 10 basis points (bps) for various tenors. It is effective from 11 July 2019. MCLR for overnight has been reduced to 8.20% from 8.30% and one-month loan tenor has been reduced by 10 bps from 8.35% to 8.25%.
Similarly, MCLR has been decreased by 5 bps for:
1) three-month loan to 8.45%
2) six-month loan to 8.55%
3) one-year tenor loans to 8.65%.
Previosly, the MCLR for three-month, six-month and one-year tenor loans were at 8.50% , 8.60% and 8.70%, respectively.

RBI's announcement:
The move comes after the announcement of RBI's Governor Shaktikanta Das who said that RBI expects faster transmission of the three successive repo rate cuts totalling 75 basis points.
In June the RBI announced 25 bps repo rate cut in the Monetary Policy review. It is expected to reduce still, in the next meeting of the monetary policy committee which is scheduled for 5-9 August.

Other banks reduces MCLR:
The State Bank of India had lowered its MCLR by 5 basis points across all tenors on 9 July 2019.
In June RBI announced rate cut in Monetary Policy review. After the announcement, Bank of Maharashtra, Corporation Bank and IDBI Bank had reduced their MCLR by 5-10 bps in the month of May 2019.

MCLR:
MCLR is abbreviated as Marginal Cost of funds based Lending Rate
MCLR refers to the minimum interest rate of a bank below which it cannot lend, except in some cases allowed by the RBI. MCLR is the reference rate or an internal benchmark set by and for the bank.

Oriental Bank of Commerce:
Founded on: 19 February 1943
Headquarters: Gurugram, India
MD & CEO: Mukesh Kumar Jain
Total assets: ₹237,541.54 crore
The Bank has around 2700 branches and 2621 ATMs across India.  It is one of the promising public sector banks (PSBs) in India.
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