Good News!  Karur Vysya Bank cuts interest rates, home-auto and personal loans become cheaper

Good News! Karur Vysya Bank cuts interest rates, home-auto and personal loans become cheaper

Karur Vysya Bank has cut its Marginal Cost of Funds Based Lending Rate (MCLR) by 0.50 percent. The new rates will be applicable from 7 August 2021.

Karur Vysya Bank

Karur Vysya Bank of the private sector has given a big gift to its customers. Karur Vysya Bank has cut its Marginal Cost of Funds Based Lending Rate (MCLR) by 0.50 percent. Karur Vysya Bank said in a regulatory filing that the bank has revised the marginal cost of funds based lending rates (MCLR) and external benchmark rate- repo linked (EBR-R) marginal cost with effect from August 7, 2021.

The interest rate for the loan for a tenor of one year will be 8.25 per cent, which was earlier 8.75 per cent. The MCLR has also been revised from 0.50 per cent to 7.50-8.15 per cent for loans of one day to 6 months tenor. The bank said that the EBR-R has been reduced from 7.35 percent to 7.05 percent.

What is MCLR?

When you take a loan from a bank, the minimum rate of interest charged by the bank is called the base rate. The bank cannot give loan to anyone at a rate lower than the base rate. In place of this base rate, now banks are using MCLR. It is calculated on the basis of marginal cost of funds, term premium, operating expenses and cost of maintaining cash reserves ratio.

RBI retained the policy rate for the seventh time in a row

Reserve Bank of India Governor Shaktikanta Das has retained the repo rate and reverse repo rate for the seventh time in a row. The repo rate has been kept at 4 percent and the reverse repo rate at 3.35 percent.

Karur Vysya Bank net profit increased

Private sector Karur Vysya Bank (KVB) reported a marginal increase in its net profit to Rs 109 crore for the first quarter ended June 30. The bank had earned a net profit of Rs 106 crore in the same period a year ago. The total income of Karur Vysya Bank declined to Rs 1,596 crore in the first quarter of FY 2021-22 from Rs 1,693 crore in the first quarter of the previous financial year 2020-21.

However, the net interest income of the bank increased by 14 per cent to Rs 638 crore from Rs 562 crore earlier. KVB’s net interest margin stood at 3.55 per cent.

The bank’s gross NPA ie bad loans accounted for 7.97 percent of the total loan in the quarter ended June 30, 2021, from 8.34 percent in the same quarter a year ago. However, net NPAs increased to 3.69 per cent in the quarter under review from 3.44 per cent in the same quarter of 2020-21 a year ago.

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