Union Bank of India reduces MCLR By 10 Bps

Union Bank of India (UBI) has reduced the Marginal Cost of funds-based Lending Rates (MCLR) by 10 basis points (100 bps = 1 per cent) all over the tenors, which will be effective from March 11, 2020 till March 31, 2020. Since July, 2019 this is the ninth consecutive rate cut announced by the bank. The new one-year MCLR of the bank now stands at 8% per annum, down from 8.10% per annum.

Naveen Kukreja, CEO of Paisabazaar, said, “UBI’s cut in the MCLR is in line with the prevalent falling interest regime. MCLR is the minimum lending interest rate which banks can lend.”

“As banks set their MCLR primarily on the basis of their cost of funds, a steady decline in deposit rates is reducing their cost of funds and thereby reducing MCLR. The cut will benefit those borrowers who have their interest rate reset date till the next review of the bank’s MCLR. Other existing borrowers of UBI under the MCLR regime will continue to repay in the same lending rate,” he said.