UCO bank plans further cut in  lending rates

UCO bank plans further cut in lending rates

Agency News

Ahmedabad, Aug 18 : Public Sector UCO Bank which recently reduced its marginal cost of funds - based lending rate (MCLR) by 15 basis points making its home and car loans cheaper by as many points said on Sunday that it was contemplating to further reduced it.

MD and CEO of the bank AK Goel, who was here to attend a two-day brain storming session of the bank to get feedback from grass-root level to suggest measures to the government about improvement of banking sector and giving a boost to the economy, told newsmen here that the bank had on August 9 reduced the MCLR by 15 basis points which has brought down the housing loan rate from 8.65% to 8.5% which was a very reasonable rate.

"In last five days we have reduced it by 15 basis points. We will think for further reduction and our asset-liability committee (ALCO) will take a call on that during its meeting next month." The MCLR is the rate based on which the retail loans such as home, car and personal advances are linked.

The decision to reduce it by 15 basis points by UCO Bank had come days after the RBI had cut the repo rate by 35 basis points.

Earlier, the the UCO Bank had said that it is planning to link the rate of interest with RBI repo rates, to pass on the benefit to customers.

Goel said that there was a growth in credit flow but it was not as expected.

To a query he also claimed that by improving the three norms of capital adequacy ratio, net NPA and profit, his bank would hopefully come out of the 'prompt corrective action' imposed by the RBI by March 2020.

He also said merger of banks was a good measure in the direction of strengthening of banking system in the country.

Goel also said the bank was working hard on recoveries. "We have set a recovery target of Rs 2,000 crore of NPA every quarter. Of our total NPA of around Rs 29,000 crore around Rs 25,500 crore was with 189 accounts only"(UNI)