Photo: Bloomberg
Photo: Bloomberg

ICICI Bank reduces lending rate by 0.05%

ICICI Bank's overnight lending rate will be 8.90% under the revised rate structure, effective Monday

Mumbai: India’s largest private sector lender ICICI Bank Ltd on Monday announced a 0.05% reduction in its marginal cost of funds-based lending rate (MCLR). The overnight MCLR will be 8.90% under the revised rate structure which is effective from Monday, people familiar with the development said.

The one-year MCLR, to which the home loans are linked, has moved down to 9.10%, they said, adding that the reductions are across tenors. The Reserve Bank of India (RBI) introduced the MCLR from 1 April this year for faster transmission of its policy actions into actual lending rates by the banks.

Lenders are given the leeway to review their MCLR once in a month and it is the hope of the RBI that the competition will help them act faster. The MCLR replaced the base rate system and so far the banks, lenders have been very quick to react to competitive forces in making marginal rate adjustments.