SBI Cuts Down MCLR Based Lending Rates; Home Loans to be Cheaper from April 10
Passing on the benefits of last week’s repo rate cut by RBI to the end customers, country’s largest public sector bank– State Bank of India (SBI), has slashed Home Loan Interest Rates by 10 basis points on Housing Loans up to Rs. 30 lakh. The new interest rate is effective from April 10, 2019.
The banking major has slashed its Marginal Cost of fund-based Lending Rate (MCLR) by five basis points across all tenors. The latest MCLR rate for SBI is 8.50 % for one year.
The Reserve Bank of India (RBI) on April 4 had slashed key interest rate for bank borrowing by 0.25 percent which was followed by a similar rate cut in the previous MCP.
Effective from Wednesday, the floating rate for Housing Loans below Rs. 30 lakh will range from 8.60 % to 8.90 % per annum from previous rates of 8.70 % to 9.00 % per annum. Though, the benefits of the rate cut would not shift to existing customers immediately, and will only be effective after the reset date of the loan, that too as per the latest rate valid then. The new customers can, however, borrow the housing loan at the new revised rate.
The SBI has also reduced the cost of cash credit and overdraft by 25bps, effective from May 1, 2019.
In line with the credit rate cut, the bank has also announced a balancing rate cut for SBI Savings Bank Account customers. Effective from May 1, 2019, the Savings Account deposits up to Rs. 1 lakh will earn interest at a rate of 3.50 % per annum, and deposits above Rs. 1 lakh will earn 3.25 % per annum.
Already, HDFC Bank Ltd, which is the largest private sector bank of the country, has reduced MCLR based lending rates by 5-10bps across tenors. The latest HDFC one-year MCLR is 8.7% per annum.
Indian Overseas Bank, which is a public sector bank based in Chennai, has also made credit borrowing affordable for customers. The IOB has slashed it MCLR by 5 basis points across tenors of one-year and above, effective from April 10, 2019.
Besides, Bank of Maharashtra has also slashed MCLR, effective from April 7, 2019. Since February, the Central Bank has also reduced its key policy rate by 50bps.
It is expected that more banks would follow suit as the benefit of 0.5% repo rate cut (since February) has been marginally transferred to the end customers. The RBI Governor Shaktikanta Das after the Monetary Policy Review had said, the RBI will hold further discussions with all the involved stakeholders including banks to work out a more effective mechanism for better transmission of rates.