Public sector lender, Bank of Baroda (BoB) has reduced marginal cost of funds based lending rate (MCLR) on one-year tenor by 10 basis points (bps). Bank of Baroda in a stock exchange filing today informed about the reduction in its MCLR with effect from 12 February. The reduction will make home, auto and other loans cheaper for new borrowers.The rate reduction comes even as Reserve Bank of India (RBI) in a surprise move had kept the repo rate unchanged at 5.15% at the last meeting on 6 February. Repo rate is the interest rate at which the RBI lends money to commercial banks.

With this, BoB's overnight MCLR rate is down 10 bps to 7.55 now and one-month rate down 5 bps to 7.55% now. It has also reduced by 10 bps in three-months and six months MCLR to 7.70% and 8%, respectively.

Bank of Baroda has also revised fixed deposit (FD) rates with effect from today, 10 February. After the latest revision, the bank is giving interest rates ranging between 4.5% to 6.25% on deposits maturing in 7 days to 10 years.

Last week country's largest lender State Bank of India (SBI) announced announced a reduction in its MCLR, or marginal cost of funds based lending rate, by 5 basis points across all tenors, with effect from 10th February. After today's rate revision, the one-year MCLR comes down to 7.85% per annum from 7.90% per annum.

Bank of India has reduced MCLR by 10 bps for maturities upto 6 months.

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