PNB, IOB cut lending rates by 75 bps effective today; PSBs to pass on repo rate cut benefit to their customers

Mumbai: State-owned banks Punjab National Bank (PNB) and Indian Overseas Bank on Tuesday announced a reduction in their lending rates linked to the repo rate by 75 basis points, effective 1 April.This follows last week''s decision by the RBI to cut the repo rate by 75 bps.Most of the public sector banks have passed on the benefit of the repo rate cut to their customers."We have decided to pass on the full benefit of the recent RBI''s policy rate cut of 75 bps to our borrowers covered under the external benchmark-linked product of repo-linked lending rate (RLLR)," PNB said in a statement. The cut is for retail and MSME borrowers, it said.Also, the Chennai-based Indian Overseas Bank (IOB) also said it has reduced RLLR by 75 bps.The new RLLR will come down from the existing level of 8 percent to 7.25 percent per annum from 1 April."Retail loans (housing, education, vehicle), loans to MSME, which are linked to RLLR, will now be available at cheaper rates," IOB said in a statement.PNB also reduced their MCLR by 30 bps across tenors and will be applicable for the amalgamated entity. PNB is merging the Oriental Bank of Commerce and the United Bank of India with it from 1 April.IOB also said it has reduced its one-year MCLR to 8.25 percent from 8.45 percent, effective from 10 April.Another public sector lender Union Bank of India said it has reduced its MCLR by 25 bps across all tenors.Its one-year MCLR will be revised to 7.75 percent, down from 8 percent from 1 April.The new benchmark rates will also be applicable to the customers of Andhra Bank and Corporation Bank, which will be amalgamated into Union Bank of India with effect from 1 April.PNB also said it has further reduced its term deposit rates in various maturities bucket with a maximum rate of 5.80 percent for deposits maturing in one year and above.