New Delhi: The State Bank of India on Monday announced a reduction in its Marginal Cost of Funds based Lending Rate (MCLR) just days ahead of the festive season. The country's largest bank slashed lending rates by 10 basis points (bps) across all tenors.
Interest rates on term deposits across all maturities were also lowered by up to 25 basis points. This is the fifth time that the bank has moved for a reduction in the MCLR and comes just weeks after it cut repo rates, the key interest rate at which it lends short-term funds to commercial banks, by 1.1 percentage point.
The lender said that the action was taken to realign its interest rates on term deposits "in view of the falling interest rate scenario". Due to this rate cut, the MCLR will now come down to 8.15% from 8.25 % from September 10.
The rates for FDs maturing in seven to 45 days for FDs, however, remains unchanged at 4.5% while those FDs maturing in 180 days to less than 1 year will fetch an interest rate of 5.8%. For FDs maturing in 2 years to less than 3 years, SBI will give an interest rate of 6.25%.
Other banks like the Central Bank of India, Axis Bank, Oriental Bank of Commerce, IDBI Bank and IDFC Bank have also been cutting rates on loans. The Reserve Bank of India (RBI) has cut the repo rate by a total of 110 bps this year.