The reduction will make home, auto and other loans cheaper for new borrowers.
With this reduction, the one-year MCLR has come down to 8.15 per cent per annum from 8.25 per cent, according to a bank statement.
The reduction in MCLR by the bank comes a day after the Reserve Bank of India left the repo rate unchanged at 5.15 per cent but announced long-term repo operation for up to Rs 1 lakh crore, making cost of funds cheaper for banks.
While the one-month MCLR has been reduced by 5 basis points to 7.55 per cent, overnight, three- and six-month rates were down by 10 basis points, it said.
Last week, market leader State Bank of India (SBI) announced 5 basis points (bps) reduction in its MCLR across tenors, effective February 10.
This was the ninth consecutive cut in MCLR by the bank in the current financial year.