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Bandhan Bank lowers lending rates by 1.48%

| | Mumbai
Bandhan Bank lowers lending rates by 1.48%

Private sector Bandhan Bank today announced a hefty 1.48 per cent reduction in its lending rates to 10.52 per cent, which will bring down its pricing for micro loans, its biggest segment, to 18.52 per cent.

"We will continue to pass on the benefit of lower cost of funds to our borrowers," Managing Director and Chief Executive Chandra Shekhar Ghosh said.

He said 95 per cent of the lender's Rs 18,500-crore credit portfolio is devoted to micro loans and added the deposit portfolio has risen to Rs 19,000 crore with 27 per cent of it being low-cost current and saving accounts (Casa).

The bank's asset-liability committee has reduced the marginal cost of funds-based lending rates (MCLR) by 1.48 per cent to 10.52 per cent, which will take the actual rate of lending for micro borrowers down to 18.52 per cent, a statement said.

All loans under Rs 1 lakh are classified by the Kolkata-based microfinance lender-turned commercial bank as micro and the revised interest rates are effective tomorrow, it said.

The private bank started operations in August 2015.

Following a New Year eve call to banks by Prime Minister Narendra Modi to help the poor by lowering their interest rates, lenders, flush with huge deposits because of demonetisation, have been announcing lending rate cuts. Top lender State Bank of India led the charge by slashing rates by 0.90 per cent yesterday.

Among the private lenders, Kotak Mahindra Bank today announced a 0.45 per cent reduction.

Banks have moved to MCLR as their new benchmark lending rates from April 2016, replacing the base rate system for new borrowers. It is calculated on the marginal cost of funds and return on networth for banks. It was introduced by the Reserve Bank to ensure better transmission of its policy actions.

 
 
 

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