SBI cuts MCLR rates again; will help reduce home loan EMIs, but not immediately
New Delhi | Jagran Business Desk: The State Bank of India on Monday announced a reduction in its marginal cost-based lending rate or MCLR by 10 basis points across all tenors -- the fifth consecutive reduction by the country’s largest bank so far this financial year.
The reduced MCLR rates of 8.15 per cent per annum will come into effect from Tuesday, i.e. September 10. Other banks are likely to follow SBI’s footsteps and could lower their MCLR rates.
The SBI has also lowered its fixed deposits or FD rates by 20-25 basis points.
"In view of the falling interest rate scenario and surplus liquidity, SBI also realigns its interest rate on term deposits from September 10," it said in a statement.
"The bank will slash retail term deposit rates by 20 to 25 basis points and bulk term deposit rates by 10 to 20 basis points across tenors."
The move follows Reserve Bank of India (RBI)'s 1.1 percentage point reduction in the repo rate - the key interest rate at which it lends short-term funds to commercial banks - so far this year.
The RBI recently directed all banks to link all new floating rate personal or retail loans (housing, auto, etc.) and floating rate loans to Micro and Small Enterprises from October 01, 2019 to external benchmarks, saying banks had not satisfactorily passed on the benefit of recent policy rate cuts to consumers.
If you are an existing home loan customer of SBI, the latest cut of 10 basis points in MCLR may not lower your home loan interest rate or EMIs immediately.
SBI’s floating rate home loans are typically linked to its one-year MCLR and it will have a one-year reset clause. For example, if the reset clause is in August and the MCLR rate cute happens in September, the home loan will remain unchanged till next August.
SBI is the largest commercial bank in terms of assets, deposits, branches, customers and employees. It is also the largest mortgage lender in the country.
As on June 30, the bank has a deposit base of over Rs 28 lakh crore with current account savings account (CASA) ratio of 45.1 per cent and advances of over Rs 19 lakh crore. SBI has about 35 per cent and 36 per cent of market share in home loans and auto loans respectively.
The bank has the largest network of 22,088 branches in India and an ATM/CDM network of over 58,495.
The number of customers using internet banking facility is more than 66 million and mobile banking services stand at 14.8 million. Downloads for YONO -- an integrated digital and lifestyle platform by SBI -- are over 23 million with more than 16 million logins per day.
On social media platforms, SBI has the highest number of followers on Facebook, YouTube, LinkedIn and Pinterest. The bank tops the list of followers on Facebook and YouTube across all banks worldwide, according to the statement.
Posted By: Abhinav Gupta