Home > industry > ICICI Bank lowers lending rates by 5 bps to 9.05%

Mumbai: Within hours of the Reserve Bank of India’s cut in the key policy rate, private sector lender ICICI Bank Ltd on Tuesday took the lead with a 0.05% reduction in its marginal cost of funds-based lending rate to 9.05%.

Under the new rates, retrospectively effective from 1 October, the one-month MCLR will be 8.85% as against 8.90% earlier, the bank said in statement.

The one-year MCLR, which is used to compute the effective yearly rate in a slew of products including the home loans, will be 9.05% as against 9.10%.

After cutting the repo rate at RBI’s fourth bi-monthly monetary policy review of 2016-17, newly appointed governor Urjit Patel was quick to point out the central bank’s dismay at lenders for holding on to higher rates. “I agree that the transmission through bank lending has been less than anyone of us would have liked to," Patel told reporters. “We are hoping that over the next quarter or two, keeping in mind the government has also reduced the small savings rates, the MCLR itself will now throw up more transmission."

Since January 2015, the Reserve Bank has reduced repo rate by 175 basis points, including Tuesday’s cut, but banks have reduced their base rates only by 60 basis points.

RBI introduced new marginal cost of funds-based lending rate from April this year.

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