Public sector lender Indian Overseas Bank has cut marginal cost of funds based lending rate (MCLR) by up to 0.30 per cent across all tenors, which will bring down cost for consumer loans.

The benchmark one-year MCLR, against which most of the consumer and retail loans are priced, has been cut by 0.20 per cent from June 10, Indian Overseas Bank (IOB) said in a release on Sunday.

IOB reduced its interest rate on loans linked to MCLR by 30 basis points in overnight tenor and by 20 bps in one month to one year tenors.

Hence, loans linked to MCLR will become cheaper, said the Chennai-based state-owned bank.

The bank has also reduced its interest rate on loans linked to Repo Linked Lending rate (RLLR) from 7.25 per cent to 6.85 per cent per annum, IOB said.

Retail loans (housing, education, vehicle etc) and credit to micro, small and medium enterprises (MSMEs), which are linked to RLLR, will now be available at cheaper rates, it added.