After State Bank of India and few other public sector banks, Kotak Mahindra Bank becomes the first private bank to cut lending rates by up to 0.45% in the new year.
Kotak bank revised the Marginal Cost of Funds based Lending Rate (K-MCLR) downwards by up to 45 basis points (bps) or 0.45% with effect from January 1, 2017 for various tenors, it said on Monday.
Another public sector lender Dena Bank also announced a 0.75% rate cut in its MCLR to 8.55% from 9.30% for one year loans, effective from January 1.
For Kotak, the overnight MCLR stands at 8.20% (down from 8.60%) while the one-year rate is at 9% reduced from 9.20%. Its home loans are pegged at 6-months MCLR rates which are at 0.65%.
On Sunday, the first day of new year, country’s largest bank SBI announced the sharpest reduction in loan rates by 0.90% to 8%. This is the lowest in the industry now. SBI has pegged its loan rates at about 0.65% above the one-year MCLR rates.
Therefore, it will charge an interest rate of 8.65% on home loans up to Rs 75 lakh, while for women the interest rate would be 8.60%.For loans above Rs 75 lakh, the interest rate would be 8.65% for women and 8.70% for others. These are all term loans.
Similarly Punjab National Bank cut rates by 0.70% to 8.20%, Union Bank of India cut rates by 0.65% to 8.65%,
On Friday, IDBI Bank took the lead in reducing interest rates by 0.40% -one of the steepest in more than three years. Borrowers seeking three-year loans will be charged 9.30%, while six-month loans have been pegged at 8.90% and one-year loans at 9.15%.