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Business News/ Industry / Banking/  SBI cuts  key lending rate by 15 bps, housing loans to get cheaper
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SBI cuts  key lending rate by 15 bps, housing loans to get cheaper

EMIs on home loan accounts linked to MCLR will get cheaper by ₹255 for a 30-year loan of ₹25 lakh, the SBI said
  • SBI also cut its interest rate on fixed deposits (FDs), citing adequate liquidity in the system, as well as with the bank.
  • State Bank of India’s one-year MCLR will come down from 7.40% per annum to 7.25% with effect from 10 May. (Photo: Bloomberg)Premium
    State Bank of India’s one-year MCLR will come down from 7.40% per annum to 7.25% with effect from 10 May. (Photo: Bloomberg)

    MUMBAI : 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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    ABOUT THE AUTHOR
    Gopika Gopakumar
    Gopika Gopakumar has worked for over 15 years as a banking journalist across print and television media. Her expertise lies in breaking big corporate stories and producing news based TV shows. She was part of the 2013 IMF Journalism Fellowship Program where she covered the Annual & Spring meetings of the International Monetary Fund in Washington D.C. She started her career with CNBC-TV18, where she also produced a news feature show called Indianomics and an award winning show on business stories from South India called Up South. She joined Mint in 2016.
    Catch all the Industry News, Banking News and Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
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    Published: 08 May 2020, 12:19 AM IST
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