BackSBI home loan EMIs to fall as bank cuts MCLR
SBI also cut its interest rate on bank fixed deposits (FDs)This is the twelfth consecutive reduction in bank’s MCLR
PremiumIndia's biggest lender State Bank of India or SBI today announced a reduction in its MCLR or marginal cost of funds-based lending rate by 15 basis points across all tenors. The one-year MCLR will come down to 7.25% per annum from 7.40% per annum with effect from May 10, 2020. This is the twelfth consecutive reduction in bank’s MCLR.
After the reduction, EMIs on eligible home loan accounts (linked to MCLR) will get cheaper by approximately ₹255 for a 30-year-loan of Rs. 25 lakh, SBI said.
MCLR rates are based on the bank's own cost of funds. If your home loan is linked to SBI's MCLR rate, the latest cut may not bring down your EMIs immediately as MCLR-based loans typically have a one-year reset clause.
SBI also cut its interest rate on bank 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 bps for tenors up to three years, effective from May 12, 2020. This is the third cut in FD rate in two months.
For senior citizens, SBI has introduced new deposit scheme called SBI Wecare Deposit. "Under this new product, an additional 30 basis points premium will be payable for senior citizen’s retail term deposits with “5 Years & above" tenor only. This scheme would be in effect up to September 30, 2020," the bank said.
SBI is the largest commercial bank in terms of assets, deposits, branches, customers and employees. It is also the largest mortgage lender in the country and claims to commands 34% market share in home loans and 34.86% in auto loans segment.
As on December 31, 2019, the bank has a deposit base of over Rs. 31 lakh crore.
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