Kotak Mahindra Bank lowers lending rate by 5 bps

Kotak Mahindra Bank became the first private sector lender to lower its lending rate by a marginal 5 basis points, following the 25 bps rate cut by the monetary authority earlier this month. It can be noted that the Reserve Bank had held a meeting with lenders earlier this month on the slow monetary transmission which is lenders passing on their lower funding cost to their borrowers, thus reducing the overall cost of finance in the economy. Punjab National Bank was among the first to respond with a 0.10 percent cut across tenors. Kotak Mahindra Bank cut the MCLR in four tenors, including the important one-year maturity ones to which all the major consumer loans including home loans are linked. Under the revised rate structure which will be effective from Friday, the bank's one year MCLR will now come down to 9 percent from 9.05 percent, while the overnight MCLR has also been reviewed down to 8.30 percent.