newsdog Facebook

SBI reduces home loan by reducing MCLR, also reduces interest on FD

Vice Daily 2019-09-10 00:00:09

good news for the loan holders of State Bank of India.  The bank has reduced the Marginal Cost of Lending Rate i.e. MCLR on all term loans.  The bank has cut MCLR by 10 basis points, which will reduce interest rates by 10 bps.  …



good news for the loan holders of State Bank of India.  The bank has reduced the Marginal Cost of Lending Rate i.e. MCLR on all term loans.  The bank has cut MCLR by 10 basis points, which will reduce interest rates by 10 bps.  The new rates will come into effect from 10 September.  (1 basis point = 0.01%).  One year MCLR will come down from 8.25% to 8.15% due to rate cut.  SBI has cut MCLR for the fifth time in the current financial year (2019-20).

 The bank has cut MCLR for the second time after RBI's monetary policy review in the month of August.  After the policy review, the bank announced a deduction of 15 basis points, which came into effect from August 10.

Not just SBI, many other banks are cutting MCLR.  Central Bank of India, Axis Bank, Oriental Bank of Commerce, IDBI Bank and IDFC First Bank have also cut rates.

 Talking about the current calendar year, RBI has so far reduced the repo rate by 110 basis points i.e. 1.10%.  However, banks have not been able to pass on its full benefits to the customers.  For better transmission of rate cut by the central bank, the bank issued instructions to all banks that all loans issued from October 1 be linked to external benchmarks.