Top News
Cheaper retail loans on anvil as majority of banks brace for 5-10 bps cuts by Mar 31
By Anjana Das
New Delhi, March 5 (IANS) After intial dithering, banks are now falling in line to cut interest rates after the RBI asked them to do so last month. A low interest rate cycle is on the anvil with a majority of banks now settling to cut lending rates by 5-10 basis points.
More banks will follow suit and they will have to cut the rates on MCLR (marginal cost of fund based lending rate) not on the spread as was done by the largest lender SBI, said a bank CEO whose bank recently reduced its rates.
Some banks have already done so and some are in the process of doing so but by March 31, most of them, or even all of them – private or PSUs – will have cut the rates by 5-10 basis points, said the banker, adding that the RBI Governor’s meeting last month on supporting economic growth by the lenders has been forceful on them on a different paradigm.
At least four PSU banks and one private bank will cut this week, said another banker. The RBI urged us to follow the rate cut and support the growth of the economy; some benefits can be passed without hurting our spreads and margins, observed the banker.
Interest rates of home loans are linked to the MCLR rate, the base rate and the bank’s spread, so the effective rate of interest on the loan varies according to the banking benchmark rates.
Bank of India, HFDC Bank, ICICI Bank and Bank of Baroda are yet to take a call on reducing MCLR rates. In fact Bank of Baroda had upped its marginal cost of funds-based lending rates by up to 20 basis points with prior to the RBI’s MPC (monetary policy committee) meeting.
Bankers also say though they face high provisioning due to NPAs and have little headroom, they would do their best to pass some portion of the rate cut to the borrowers. But passing the entire cut in the repo rate of 25 per cent is not possible as they need to protect their margins. Banks did not cut their MCLR rates following a 25 basis point cut in repo rate by RBI in the fifth bi-monthly policy review in February, raising questions on the effectiveness of the RBI step if these reductions were not to be passed on to home loans or retail lending rates to boost growth.
Banks did inform RBI that there is huge gap between deposit (6.1 per cent) and credit growth (9.3 per cent) which prohibits from cutting the rates. The attractive rates on small savings and Provident Funds also results flight of depositors from banks. The SBI rate cut of just 5 basis points is on spread and not benchmark rate and will not impact all borrowers. A banker said SBI has cut in spread and not on MCLR as, without reducing the deposit rate, it is not possible to cut the MCLR.
Most recently, Union Bank of India reduced lending rates by 10 bps whereby it has cut its one year MCLR or the minimum lending rate, against which most of the consumer loans are benchmarked, to 8.60 per cent from 8.70 per cent. It also reduced the base rate from 9.10 per cent to 9 per cent. The new rates are effective March 1, 2019.
Private sector lender Kotak Mahindra Bank has lowered its lending rate by a marginal 5 basis points, taking its new one year MCLR to 9 percent.
Punjab National Bank (PNB) has reduced the MCLR by 0.10 percentage points for loans of various s. The one-year tenor loans have been cut to 8.45 per cent from 8.55 per cent.
Allahabad Bank has also cut MCLR by 10 basis points for all the tenures up to three years with effect from March 1.
–IANS
ana/sn/vm
Top News
Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
Foodman Vishal Singh Honored for Hunger Free World Mission in Bangkok
Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
Cheers and Cheers: Barzilla’s Joyful Ode to Inclusivity and Celebration
Casino Days Reveal Internal Data on Most Popular Smartphones
Meghalaya Reserves Legalized Gambling and Sports Betting for Tourists
IPL 20202 UPDATE: KXIP vs MI IPL Dream11 Team Prediction for Today Match, Update Point Table of all Team.
In a Live debate AAP leader Syed Asad Abbas hurls abuses to BJP spokesperson Nupur Sharma.
‘India’s Most Wanted’ trailer out Arjun Kapoor on hunt of Osama-Bin-Laden
Time to move on: Sonakshi on Shatrughan’s joining Congress
