Home Banking And Finance SBI slashes MCLR by 15 bps across all tenors

SBI slashes MCLR by 15 bps across all tenors

On March 27, the RBI, in its first COVID package, had slashed the repo rate by 75 bps to 4.40 per cent and cash reserve ratio (CRR) — the portion of deposits to be kept with the RBI — by 100 bps to 3 per cent.

State Bank of India (SBI), the country’s largest lender, on Thursday slashed its marginal cost of funds based lending rate (MCLR) by 15 bps across all tenors.

The one-year MCLR has come down to 7.25 per cent from 7.40 per cent, with effect from May 10. This is the 12th consecutive reduction in the bank’s MCLR. Consequently, EMIs on eligible home loan accounts (linked to MCLR) will get cheaper by around Rs 255 for a 30-year loan of Rs 25 lakh. Further, in view of adequate liquidity in the system as well as with the state-run lender, SBI has cut its interest rates on retail term deposits by 20 basis points (bps) for ‘up to 3 years’ tenor with effect from May 12.

On April 17, the Reserve Bank of India (RBI) had cut the reverse repo rate for banks by 25 bps from 4 per cent to 3.75 per cent, with immediate effect, in a bid to prompt banks to deploy surplus funds in investments and loans in productive sectors of the economy instead of parking it with the central bank.

The state-owned bank has also cut interest rates on its retail term deposits by 20 bps for ‘up to 3 years tenor’. The cut in deposit rates is aimed at maintaining adequate liquidity in the larger system as well as the bank.

On March 27, the RBI, in its first COVID package, had slashed the repo rate by 75 bps to 4.40 per cent and cash reserve ratio (CRR) — the portion of deposits to be kept with the RBI — by 100 bps to 3 per cent.

Meanwhile, to safeguard the interests of senior citizens in the current falling rate regime, the bank has introduced a new product ‘SBI Wecare Deposit’ for senior citizens in the retail term deposit segment.

Source

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