After SBI, now ICICI bank cuts lending rate by 0.7 pc

Photo of logo of India's leading private sector ICICI Bank.

New Delhi: After one of India’s leading lender State Bank of India (SBI) yesterday announced to cut benchmark interest rate across various maturities by 0.9 percent, another private bank ICICI along with several others today also cut the base lending rate by 0.70 per cent making home, auto and other loans cheaper.

The bank has reduced marginal cost of funds based lending rate (MCLR) by 0.7 per cent to 8.20 per cent for 1-year tenure, ICICI Bank said in a statement.

“The revised MCLR benchmarks effective from January 3,” the bank said.

The reduction in interest rate will bring down interest rate on home and other loans linked to one-year MCLR by similar percentage point.

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The one-year MCLR of SBI was reduced to 8 per cent from 8.90 per cent yesterday.

Banks are cutting lending rates after spurt in deposits following demonetisation of old high denomination currency notes of Rs 500/1,000.

The reduction in lending rate may prompt increase in credit offtake which has moderated substantially putting burden on balancesheet of banks.

Besides ICICI Bank, other lenders like Kotak Mahindra Bank, Dena Bank, Bandhan Bank, Andhra Bank and Oriental Bank of Commerce also slashed MCLR.

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Yesterday, SBI, PNB and Union Bank of India had reduced MCLR rate.