One bps is one-hundredth of a percentage point. India’s largest bank State Bank of India (SBI) today reduced its marginal cost of funds-based lending rate (MCLR) by 35 basis points (bps) across all tenors with one-year MCLR, effective April 10. This is the eleventh consecutive cut in MCLR in FY 2019-20. The move will benefit borrowers from SBI having MCLR-linked floating rate loans, like home loans.
The country’s largest lender announced to realign its interest rates on savings bank deposits, with effect from 15 April 2020. The bank reduced the savings deposit rates by 25 bps from 3% to 2.75% for balances up to ₹1 lakh and 25 bps from 3% to 2.75% for balances above ₹1 lakh.
The one-year MCLR comes down to 7.40% per annum from 7.75% per with effect from April 10, 2020, EMIs on eligible home loan accounts (linked to MCLR) will get cheaper by around ₹24.00 per 1 lakh on a 30-year loan. The bank reduced domestic retail term deposit(TD) interest rates by 20 bps to 50 bps across tenors and bulk TD interest rates reduced by 50 bps to 100 bps across tenors.
Last month, SBI sharply reduced the fixed deposit(FD) rates after RBI cut interest rates by 75 basis points to 4.4%. SBI had earlier announced an interest rate cut on FDs on 10th March.