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Private lender Karur Vysya Bank has revised marginal cost of funds based lending rates (MCLR) with effect from 7 October, the bank said in an exchange filing on Wednesday

The Bank has revised overnight MCLR to 7.40% from the existing 7.50%, while the one-month MCLR has been revised to 7.55% from 7.65%.

MCLR is the minimum lending rate below which a bank is not permitted to lend. Banks use MCLR to assess the risk factors for loans they give and also adjust their interest rates as soon as the repo rate changes. The implementation aims at improving the openness in the structure followed by the banks to calculate the interest rate on advances.

On Wednesday, Karur Vysya Bank's stock has dropped 1.79% at 46.55 on NSE. The stock has underperformed since the start of 2021, with just a marginal gain of 1.31%. In the past one month it has gained around 9.14%.

Ace investor Rakesh Jhunjhunwala holds 3,59,83,516 shares of the private lender, which is around 4.5% per cent of the net company's stock.

The Bank reported a strong business update in the September quarter as its total business grew 6.93% to 1,19,261 crore (provisional). It was 1,11,530 crore in the same quarter last year (Q2 FY21).

The bank said its total deposits grew 7.02% to 65,410 crore in Q2FY22 over Q2FY21. Meanwhile, total advances stood at 53,851 crore in Q2FY22, up 6.83% over same period last year.

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