New Delhi | Agencies: The country's largest lender State Bank of India on Thursday slashed benchmark lending rate by 0.15 basis points from 7.4 per cent to 7.25 per cent, and a new product for senior citizens in Retail Term Deposit segment.

In a statement, the SBI said, "To safeguard the interests of senior citizens in the current falling rate regime, the bank has introduced a new product 'SBI Wecare Deposit' for them in the retail term deposit segment."

"Under this new product, an additional 30 basis points premium will be payable for senior citizen's retail term deposits with "5 Years & above" tenor only," it added.

Thus, the effective rate of interest for Retail TDs of Senior Citizens will be 50 bps higher for Retail TD of 'below 5 years' tenure than the rate applicable for the general public (no change in premium).

For Retail TD of '5 years & above' tenure (new product) will be 80 bps higher than the rate applicable for the general public (30 bps extra premium). This additional premium will not be payable in case of premature withdrawal.

The special scheme will be in effect up to September 30.

However, the lender slashed its interest rates on retail term deposits by 20 basis points for 'up to 3 Years' tenor, effective from May 12 in view of adequate liquidity in the system as well as with the bank.

With regard to revision in the lending rate, the bank said, the marginal cost of funds based lending rate (MCLR) comes down to 7.25 per cent from 7.40 per cent with effect from May 10.

Consequently, EMIs on eligible home loan accounts (linked to MCLR) will get cheaper by approx Rs 255.00 for a 30-year loan of Rs 25 lakh, it said.

This is the twelfth consecutive reduction in the bank's MCLR, the bank added.

According to IANS, MCLR is the minimum lending rate below which a bank is not permitted to lend. It is an internal reference rate for banks to determine the interest they can levy on loans.

(with ANI, IANS inputs)

Posted By: James Kuanal