Oriental Bank of Commerce (OBC) on Monday announced that it has slashed down its1-year marginal cost of funds based lending rate (MCLR) rate by 80 basis points.
This could entail lower borrowing rates for auto and home loan customers.
From January 3, the 1-year MCLR stands revised down to 8.60 per cent from 9.40 per cent, OBC said in a filing with the stock exchanges.
This is the first time OBC has revised it's MCLR post the November 8 demonetisation announcement.
The surge in CASA deposits post the November 8 demonetisation announcement has prompted OBC to slash down its MCLR, sources said.
OBC is quite confident of maintaining its margins despite the sharp cut in lending rates. MCLR is basically the internal benchmark lending rate for banks.
Based upon the MCLR, interest rates for different types of customers are fixed in accordance with the riskiness.
OBC has also reduced MCLR for other maturities - overnight MCLR, 1 month MCLR, 3 month MCLR and 6 months MCLR.
Srivats.kr@thehindu.co.in