Borrowing from Syndicate bank has now become cheaper by 10 percent and is a positive signal to individual consumers and industries.
Syndicate bank has cut its MCLR in the range of 5 basis points to 10 basis points. For a term of one year, Bank of India would charge 9.45 % while Syndicate bank will charge 9.35 percent.The same rate is cheaper by 10 bps.The sixth-month lending rate for Syndicate bank is 9.40 percent while the same rate for bank of India stands at 9.25 percent.
Also, the three-month lending rates have been revised to 9.35% while the same rate for Bank Of India stands at 9.20 percent.The new rates will be effective from October 7th.
RBI has been pushing banks to arrive at lending rates and pass on the rate benefits to the end users by changing the base rate calculation methodology to marginal cost based model.
This is said to be the first policy from RBI which is actually set by monetary policy terms (MPC.)
When asked, RBI governor, Urjit Patel sounded disappointed and said that the transmission of interest rate cuts by banks has not been up to the mark despite the 150 basis point rate cut by the Reserve Bank Of India since January 2015. “The transmission of lending rate to bank borrowers has been less than what anyone of us would have liked it to be” he stated. But the Central bank hopes the recent cuts in small saving rates will lead to lower rates and and will ultimately reduce the borrowing rates.
