Photo: Mint
Photo: Mint

SBI cuts MCLR-based lending rates by 5 bps to 8.5%

  • SBI's one-year MCLR cut from 8.55% to 8.5% effective 10 April
  • SBI reduces home loan rate by 10 bps for loans of up to 30 lakh

MUMBAI : Mumbai: India's largest bank, State Bank of India (SBI), has reduced its marginal cost of funds-based lending rate (MCLR) by 5 basis points (bps) across tenors. The one-year MCLR was cut from 8.55% to 8.5% effective 10 April.

One basis point is one-hundredth of a percentage point.

SBI has also reduced its home loan rate by 10 bps for loans of up to 30 lakh, in a move that has provided relief to home loan borrowers. The new rate for housing loans will be 8.6-8.9%.

Following the 25bps reduction in repo rate by the Reserve Bank of India (RBI) last week, SBI’s cash credit and overdraft will be reduced by 25bps with effect from 1 May. The savings bank rate also stands revised to 3.5% for balances up to 1 lakh and 3.25% for above 1 lakh.

On Monday, the largest private sector bank HDFC Bank Ltd had reduced its MCLR by 5-10bps. The bank’s one-year MCLR stands revised at 8.7%.

The central bank has reduced its key policy rate by 50bps over two consecutive rate cuts since February.

In response, the lenders have not been able to pass on the entire benefit to customers because of tight liquidity conditions.

On 4 April, RBI governor Shaktikanta Das said banks needed to do more andthe banking regulatorwill hold consultations with banks to work out an effective mechanism for monetary transmission.