According to sources the country’s second largest private lender, ICICI Bank has cut the marginal cost of funds based lending rate (MCLR) by five basis points across tenors while Kotak Mahindra Bank has cut the MCLR by 10 basis points in select tenors from April 1. Reportedly according to the lender’s website ICICI Bank has reduced rates for overnight and one month tenors to 8.5%, two month tenor to 8.55%, six-month tenor to 8.7% and one year tenor to 8.75%.
Furthermore Kotak Mahindra Bank has cut rates by 10 basis points for one year tenor to 8.9% and five basis points for two year and three year tenors to 9%. Hence the private sector lender had reduced other rates by five basis points on March 1. Apparently the rate cuts come just as the Monetary Policy Committee (MPC) begins this financial year’s first bi-monthly three day policy review meeting on April 2. Perhaps the MPC will announce its policy decision on April 4. In February 2018, the MPC had surprised markets by reducing the policy rate by 25 basis points to 6.25%.
Moreover it is largely expected to deliver another 25 basis points rate cut in the April policy as well. Earlier on March 8, the country’s largest lender, the State Bank of India (SBI) had said it will link select rates to the Reserve Bank of India’s (RBI) key policy rate for better policy transmission from May 1 and the lender did not change any rates.
