State Bank of India (SBI), the country’s largest lender, on Monday reduced its benchmark lending rate — the MCLR — by 10 basis points (bps). With this cut, the one year MCLR of the bank, to which most loan rates are linked, will be 8.15% with effect from Tuesday.
The move will benefit all the existing SBI customers having home, auto and any other category of loans that are linked to the marginal cost of fund based lending rate (MCLR). The rate cut is aimed at boosting loan demand in this festive season.
This is the fifth rate cut by the SBI this financial year. The bank has cut its MCLR by 40 bps since April.
SBI has also reduced the retail fixed deposit rates by 20-25 bps and bulk deposit rates by 10-20 bps across various tenures due to surplus liquidity and falling interest rates, the bank said in a statement. The peak FD rate for SBI’s retail customers (that is deposits upto ₹2 crore) is 6.5% for maturities of 1 year to less than 2 years.
Non-banking finance company Bajaj Housing Finance Limited (BHFL), a 100% subsidiary of Bajaj Finance Limited, has also reduced its home loan rates to 8.60% from 8.80% for upto 30 lakh.