State Bank of India on Friday reduced its marginal cost of funds based lending rate (MCLR) by 5 basis points across all tenors and sharply slashed the deposit rates between 15 and 75 basis points.
This is the seventh consecutive cut in lending rates by the bank this financial year. With this reduction, the one-year MCLR, to which most of its loan prices are linked, will come down to 8 per cent, the bank said in a statement.
The bank also revised its interest rates on term deposits on account of adequate liquidity in the system. The new deposit rates will also be effective from November 10. It has reduced interest rate on retail term deposit by 15 basis points for one year to less than two years’ tenor. Bulk term deposit interest rates have been reduced by 30 to 75 bps across tenors, the bank said.
On October 9, close on the heels of the Reserve Bank’s fifth cut in repo rate, SBI slashed the interest rate on savings bank deposits (with balances up to Rs 1 lakh) by 25 basis points from 3.5 per cent to 3.25 per cent with effect from November 1, 2019.
The bank then also slashed its retail term deposit and bulk term deposit interest rates by 10 bps and 30 bps respectively for ‘1 year to less than 2 years’ tenor with effect from October 10, 2019. It has also reduced the MCLR (Marginal cost of funds based lending rate) by 10 basis points, making home and personal loans cheaper.
SBI had earlier linked the interest rate on savings account deposits with balance of over Rs 1 lakh to repo rate. Currently, it stands at 3 per cent.