PremiumMUMBAI : India’s biggest lender State Bank of India (SBI) on Thursday announced a reduction in its marginal cost of funds-based lending rate (MCLR) by 15 basis points across all tenors.
The one-year MCLR will come down from 7.40% per annum to 7.25% with effect from 10 May. This is the 12th consecutive reduction in the bank’s MCLR. MCLR is based on the bank’s own cost of funds.
Following the reduction, equated monthly installment (EMIs) on home loan accounts linked to MCLR will get cheaper by ₹255 for a 30-year loan of ₹25 lakh, SBI said. However, the latest cut may not bring down the EMIs immediately, as MCLR-based loans typically have a one-year reset clause.
SBI also cut its interest rate on fixed deposits (FDs), citing adequate liquidity in the system, as well as with the bank.
SBI cut its interest rates on retail term deposits by 20 basis points for tenors up to three years, effective 12 May. This is the third cut in FD rates in two months.
For senior citizens, the public sector bank has introduced a new deposit scheme, SBI Wecare Deposit. “Under this new product, an additional 30 basis points premium will be payable for senior citizen’s retail term deposits for “5 years and above" tenor only.
This scheme will be in effect till 30 September, the public sector lender said.
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