Punjab National Bank has cut marginal cost based lending rates by up to 0.25 percent for select maturities, effective tomorrow (Sept 01).
The state-owned lender has also slashed its base rate by 0.20 percent to 9.15 per cent.
“The bank has reduced marginal cost of funds based lending rate (MCLR) by 20-25 basis points with effect from September 1, 2017,” PNB said in a regulatory filing.
It has trimmed the MCLR by 0.25 percent each for overnight to 7.75 percent.
Besides, it had reduced the MCLR by 0.20 percent on one- month, three-month and six months maturities to 7.90 percent, 8 percent and 8.10 percent respectively.
It has also reduced the MCLR by 0.20 percent on one- year, three years and five years maturities to 8.15 percent, 8.30 percent and 8.45 percent respectively.
Banks had adopted MCLR from April 2016 following the directive of Reserve Bank of India. However, a majority of them still follow the base rate or the minimum lending rate formula to charge interest on loans.
MCLR, which is changed every month, is a uniform methodology which was introduced to ensure fair interest rates to borrowers as well as banks.
The PNB stock was trading 0.25 percent lower at Rs 141.95 on BSE.