PNB loans to get cheaper as bank cuts MCLR rates from May 1

Revised lending rate will be 8.35% for one-year credit, as against 8.45% currently

Public sector lender Punjab National Bank has decided to cut its marginal cost of funds-based lending rate (MCLR) by 10-15 basis points across different maturities from May 1.

The revised MCLR, the internal benchmark for pricing loans, will be 8.35 per cent for one-year credit from May 1, as against 8.45 per cent prevailing in April 2017.

The rate for overnight credit will be cheaper by 15 basis points at 8.05 per cent in May, down from 8.20 per cent in April. For five-year loans, the new rate will be 8.65 per cent as against 8.75 per cent in April, PNB said in a statement today.

Fresh loans and renewal of existing credit will be done at revised rates.

The downward revision in rates comes after a gap of four months. The Delhi-based lender had cut MCLR by 70 bps across all maturities in January 2017, taking benefit of a sharp drop in cost of funds after demonetisation.

The MCLR regime came into effect from April 01, 2016, replacing the old base rate regime to improve transmission of policy rates and transparency in fixing rates.

PNB has reduced MCLR by 105 basis points since April 2016 on one-year bucket and by 110 basis points for overnight credit.