Banks have lowered their lending rates by about 1 per cent post demonetisation, the Prime Minister's Office (PMO) said on Tuesday, citing “multiple benefits” of the scrapping of old high-value currency notes.
On January 1, State Bank of India surprised the markets by slashing the marginal cost of funds based lending rate (MClR) by 0.9 per cent. Other banks followed suit. “loans got cheaper since lending rates declined by around 100 basis points”, said the PMO in a tweet while highlighting the “multiple benefits of demonetisation”. The PMO further said real estate priced declined. Revenues of urban local bodies (UlBs) across the country increased almost 3 times as consumers were allowed to pay their dues in the demonetised currency.
The revenues of UlBs in Uttar Pradesh increased 4 times while that of Madhya Pradesh and Gujarat were up almost 5 times.