The State Bank of India (SBI) has cut its MCLR rates by 15 basis points across all tenors in FY19-20. The one-year MCLR rates will be at 8.25 percent per annum with effect from August 10, 2019.
This is a fourth successive MCLR rate cut by the SBI.
MCLR or Marginal Cost of Funds based Lending Rate is an internal reference rate for banks to decide what interest they can charge on loans.
In its August monetary policy committee on Wednesday the Reserve Bank of India (RBI) cut the repo rate by 35 bps to 5.40 percent while retaining its stance at 'accommodative'.
One basis point is equal to one-hundredth of a percentage point.
The rate cut will make home loans cheaper by 35 basis points, effective from April 10, 2019.
The country's largest lender has also been offering a repo rate-linked home loan product which has been effective from July 1, 2019.
"With today’s cut in the policy rate, SBI’s effective repo-linked lending rate (RLLR) for CC/OD
"SBI has effected full transmission of repo rate cuts by the RBI and has passed on the benefit of repo rate reduction by 85 bps during the current financial year to its CC/OD customers with limits above Rs 1 lakh," it further added.
The bank had also cut its lending rates on retail and bulk term deposits as well as time deposits with shorter tenors such as those up to 179 days. The bank said it has cut interest rates on retail term deposits of less than Rs 2 crore by 20 basis points and on bulk term deposits by 35 bps.
The August repo rate cut is RBI governor Shaktikanta Das' fourth straight rate cut since he took office in December 2018. The MPC has changed its stance twice in the past four policies.
First Published: IST