The bank has set the new six month MCLR at 8.50 per cent and two year at 8.70 per cent.
Mumbai: State-run Union Bank of India on Friday said it has reduced marginal cost of funds-based lending rate (MCLR) by 10 basis points across all tenors.
The lender has reduced 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 earlier.
"Taking a cue from the latest measures announced by the Reserve Bank of India (RBI) and to support growth of economy, we have reduced MCLR by 10 basis points across all tenors," the bank said in a statement.
The bank has set the new six month MCLR at 8.50 per cent and two year at 8.70 per cent. It has also reduced base rate from 9.10 per cent to 9 per cent. The new rates are effective of March 1, 2019.
Banks have started reducing their MCLR rates following a 25 basis point cut in repo rate by RBI in the fifth bi-monthly policy review in February.
On Thursday, private sector lender Kotak Mahindra Bank on Thursday lowered its lending rate by a marginal 5 basis points. Its new one year MCLR now stands at 9 per cent. Punjab National Bank (PNB) has reduced the MCLR by 0.10 percentage point for various tenor loans.
The one-year tenor loans has been cut to 8.45 per cent from 8.55 per cent. Post the RBI's reduction of the repo rate, SBI reduced home loan rates by 5 basis points for all loans up to Rs 30 lakh.
Union Bank also said Manas Ranjan Biswal has assumed the charge of executive director of the bank.