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ICICI Bank today announced a 0.05 per cent reduction in its marginal cost of funds based lending rate (MCLR).
The overnight MCLR will be 8.90 per cent under the revised rate structure which is effective today, sources said.
The one-year MCLR, to which the home loans are linked, has moved down to 9.1 per cent, they said, adding that the reduction is across tenors.
The RBI introduced the MCLR from April 1 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.
MCLR replaced the base rate system and so far the banks have been very quick to react to competitive forces in making marginal rate adjustments.
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