Even though RBI has not reduced the repo rate in this review meeting, after SBI and HDFC Bank, now Bank of Baroda and Bank of India have also announced to give interest rate cut to its customers. State-owned BoB and BoI have reduced interest rates on various term loans. BoB has cut the Marginal Cost Based Interest Rate (MCLR) by 0.5% on a one-year loan. In this way, the bank's MCLR based interest rate on the loan for a period of one year will be 8.25 %. The MCLR has been reduced by 0.20 %. This interest rate has been 7.65 %.

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The statement issued by BoB said on Tuesday that the three-month and six-month MCLR has been reduced by 0.10 % to 7.8 % and 8.1 % respectively. The bank said that the new rates will be effective from December 12. With this, Bank of India has also cut interest on one day loan by 0.20 %. In this way the rate has been increased to 7.75 %. The interest rate on other term loans has been cut by 0.10 %. In this way, the bank will now take an interest of 8.2 % instead of 8.3 % on one year loan. BoI has stated that the new interest rates have come into force with immediate effect.

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Earlier on Monday, the country's largest bank SBI announced a 0.10 % reduction in the interest rate on loans for a period of one year. Thus the Bank's one year MCLR was reduced to 7.90%. HDFC Bank has cut MCLR rates by 0.15 %. Home, Auto, and Personal loans have become cheaper for customers due to a reduction in MCLR from banks.

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