Following the footsteps of State Bank of India, Pubjab National Bank and the Union Bank of India, now the State Bank of Hyderabad and Kotak Mahindra bank have both cut their Marginal Cost based Lending Rates (MCLR).
According to Cogencis, State Bank of Hyderabad cut its MCLR by 10 bps while Kotak Mahindra Bank cut its MCLR based loan rates by 20-45 bps.
Banks moved to MCLR as their new benchmark lending rate in June 2016. MCLR is calculated on the marginal cost of borrowing and return on net worth for banks which ensures fair interest rates to borrowers and banks.
In the aftermath of demonetization, SBI cut its MCLR-based lending rates by 0.9%, PNB slashed its rates by 0,7% to 8.45% from 9.15%.
The shares of Kotak Mahindra Bank were trading at Rs 710.40 apiece, down Rs 8.65 or 1.20% from previous close.
Image Source: Kotak Mahindra Bank website