ICICI Bank, the country’s second-largest private sector lender, on Monday cut its marginal cost of funds based lending rate (MCLR) across all tenors by 10 basis points (bps) effective December 1, with its one-year MCLR at 8.25%.
This is the fourth consecutive cut since August and is the lowest among the top five private sector lenders along with Axis Bank.
According to the bank’s website, the overnight, one-month, three-month, six-month and one-year MCLR stood at 8%, 8%, 8.05%, 8.2% and 8.25% respectively. The one-year MCLR has seen a decline of 30 bps from 8.65% in August.
In the September quarter, ICICI Bank had recorded a domestic loan growth of 16.4% year-on-year (y-o-y), driven by 22.2% y-o-y growth in retail loans. The corporate portfolio of the bank witnessed a 7.3% y-o-y growth.
Earlier, public sector lender State Bank of India (SBI) had cut its MCLR to 8%. HDFC Bank, Kotak Mahindra Bank and Yes Bank have pegged their one-year MCLR at 8.3%, 8.5% and 9.7% respectively. Axis Bank also has also set its one-year MCLR at 8.25%. MCLR is the minimum interest rate that a bank can lend at. The cut in MCLR comes at a time when the non-food credit growth fell to 7.92%, the lowest in two years. From February onwards, the Reserve Bank of India (RBI) has cut the repo rate by 135 basis points.
As on November 29, the liquidity surplus in the banking system rose to Rs 2.54 lakh crore from Rs 1.95 lakh crore a week ago, indicating reduced lending activity.
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Source: Financial Express