SBI lowers one-year MCLR rate by 10 bps to 7.9%1 min read . Updated: 09 Dec 2019, 01:22 PM IST
- Following the move, the one-year MCLR will come down to 7.90%
- RBI has lowered its repo rate by 135 bps between February and December
MUMBAI : India's largest lender State Bank of India (SBI) on Monday said it will reduce its one-year marginal cost of funds-based lending rate (MCLR) by 10 basis points (bps) to 7.9% from 10 December.
This cut, the bank said in a statement, is the eighth consecutive cut in MCLR in FY20.
"To pass on the benefit of its reducing cost of funds to customers, country’s largest lender State Bank of India (SBI) has announced the reduction in its one-year MCLR by 10 bps," said SBI.
While transmission of repo rate cuts into lower lending rates for customers has been a bone of contention between the Reserve Bank of India (RBI) and banks, the central bank said last week it is hopeful of quicker transmission in the coming days. According to RBI data, the 1-year median marginal cost of funds-based lending rate (MCLR) has declined 49 basis points and the weighted average lending rate (WALR) on fresh rupee loans sanctioned by banks declined by 44 basis points, while the WALR on outstanding rupee loans increased by 2 basis points during this period. RBI has lowered it's repo rate by 135 bps between February and December.
Meanwhile, monetary transmission has been full and reasonably swift across various money market segments and the private corporate bond market. Transmission to various money and corporate debt market segments ranged from 137 bps (overnight call money market) to 218 bps (3-month commercial papers of non-banking finance companies). Transmission to the government securities market has been partial at 113 bps (5-year government securities) and 89 bps (10-year government securities).