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    Private banks lag PSU, foreign lenders in passing on rate cut benefits to borrowers - Livemint thumbnail

    Private banks were the slowest to pass on the benefits of falling interest rates to their customers in 2019 compared to their state-run and foreign rivals, Reserve Bank of India (RBI) data showed.The median one-year marginal cost of funds-based lending rate (MCLR) for private banks fell a meagre 12 basis points (bps) to 9.18% between January and December 2019, compared to RBI’s cumulative 135 bps cut in its key policy rate to 5.15%. Most bank loans are typically priced over the one-year MCLR, making it the most tracked rate. Graphic by Sarvesh Kumar Sharma/Mint In the same period, state-run banks have lowered their one-year median MCLR by 45 bps and foreign banks have cut their lending rates by 75 bps. Foreign banks have the lowest median one-year MCLR rate at 7.9% as of December. Their public counterparts are at 8.3%. For all scheduled commercial banks taken together, the one-year median rate stands at 8.3%.The reason private banks are less eager to cut interest rates lies in their c
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