Bank of Baroda , one of India's leading public sector banks, has announced a reduction in its Marginal Cost of Funds Based Lending Rate (MCLR) for select tenors, effective September 12. This move is likely to impact borrowing costs for various floating-rate loans.

Key Changes in MCLR Rates

• Overnight MCLR: Reduced by 10 basis points to 7.85% from 7.95%
• Three-Month MCLR: Cut by 15 basis points to 8.20% from 8.35%
• One-Month MCLR: Remains unchanged at 7.95%
• Six-Month MCLR: Stays steady at 8.65%
• One-Year MCLR: Maintained at 8.80%

The one-year MCLR, which serves as a key benchmark for home and auto loans, has been kept unchanged at 8.80%. This indicates that borrowers with loans linked to this benchmark may not see an immediate impact on their EMIs.

Impact on Borrowers

The reduction in overnight and three-month MCLR rates could potentially benefit short-term borrowers and those with loans linked to these tenors. However, the impact on long-term loans such as home loans and auto loans is likely to be minimal, given that the one-year MCLR remains unchanged.

Understanding MCLR

MCLR is the minimum interest rate below which banks cannot lend, except in some cases allowed by the Reserve Bank of India. It directly affects borrowing costs for floating-rate loans and is an important indicator of the overall interest rate scenario in the banking sector.

Bank's Official Communication

Bank of Baroda has officially communicated these changes to the stock exchanges, in compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The bank's Company Secretary, S Balakumar, signed off on the notification dated September 10, confirming the MCLR revisions effective from September 12.

This move by Bank of Baroda comes amidst a dynamic interest rate environment in India's banking sector. While the reduction in some MCLR tenors might provide some relief to certain categories of borrowers, the overall impact on the bank's loan book and borrower EMIs remains to be seen.

Borrowers and investors are advised to keep track of these changes and assess their potential impact on loan agreements and investment decisions.

Bank of Baroda , one of India's leading public sector banks, has significantly expanded its digital payment offerings by introducing three new international features to its UPI app, bob e-Pay. This move marks a major step towards facilitating cross-border transactions and enhancing the bank's global presence in the digital payments space.

Global QR Code Payments

The newly launched UPI Global Acceptance service allows Bank of Baroda customers to make QR code payments in eight countries, including the United Arab Emirates, United States, Singapore, and France. This feature provides users with the convenience of seeing transaction amounts displayed in both local and Indian currencies, making international purchases more transparent and user-friendly.

Real-Time Remittances from Singapore

In a move that could benefit the large Indian diaspora in Singapore, Bank of Baroda has introduced a Foreign Inward Remittance feature. This service enables real-time money transfers from Singapore residents to Bank of Baroda customers in India. The app automatically converts Singapore Dollars to Indian Rupees, streamlining the remittance process.

NRI Account Linking

The bank has also extended its services to Non-Resident Indian (NRI) customers. NRIs can now link their NRE (Non-Resident External) or NRO (Non-Resident Ordinary) accounts to the bob e-Pay app. This feature allows them to send and receive money using their domestic mobile numbers, bridging the gap between international banking and local convenience.

Transaction Limits and User Base

To ensure security and compliance with regulatory norms, Bank of Baroda has set daily and per-transaction limits of ₹1 lakh for all international transactions conducted through the bob e-Pay app. This prudent measure balances convenience with risk management.

The bob e-Pay app, which serves over 1.3 million registered users, is now available to both Bank of Baroda customers and non-customers. This wide accessibility underscores the bank's commitment to financial inclusion and digital banking solutions.

Recent MCLR Revision

In a separate development, Bank of Baroda has also revised its Marginal Cost of Funds Based Lending Rate (MCLR). The revision sees a reduction in MCLR across various tenors, potentially benefiting borrowers:

This rate cut could lead to lower interest rates on loans linked to MCLR, providing some relief to borrowers in the current economic climate.

Bank of Baroda's latest moves in expanding its digital payment services internationally and adjusting its lending rates demonstrate the bank's adaptability to changing market conditions and its focus on enhancing customer experience in both domestic and global markets.