SBI Cuts Interest Rates on Home Loans & Fixed Deposits Yet Again

SBI Cuts Interest Rates on Home Loans & Fixed Deposits Yet Again

Ahead of festival season in India, the largest public sector bank of the country, State Bank of India has slashed its lending and deposit rates across all tenures. This is fifth reduction in the last fiscal year and a second one in the last 30 days.

The one-year Marginal Cost of Lending Rate (MCLR) effective from today is 8.15% p.a. The banking major is persistent in transmitting rate cut benefit to most borrowers as the cut has been consistently announced throughout the year. Borrowers with five different reset periods would be able to enjoy the benefit of the lowered rate. Also, the news came at the backdrop of RBI’s announcement on linking of bank’s floating rates with external benchmarks such as repo rate and treasury bills from October 1.

In this calendar year, RBI has already slashed repo rate by 110 basis points and thus the Home Loan Interest Rates are slated to go down further. All these steps ahead of the festive season are certainly a step in direction to induce the credit demand in the coming months.

SBI MCLR Rates, effective from September 10, 2019

Tenor MCLR Rates (in % , revised) MCLR Rates (in %, previous)

Overnight

7.80

7.90

One Month

7.80

7.90

Three Month

7.85

7.95

Six Month

8.00

8.10

One Year

8.15

8.25

Two Years

8.25

8.35

Three Years

8.35

8.45

In another development, Bajaj Housing Finance also announced a rate cut in Home Loan rates on Monday from 8.8% to 8.6% for small ticket loans up to ₹30 Lakh.

SBI Deposit Rates

Balancing the rate cuts & surplus liquidity, the SBI has also reduced its Fixed Deposit Rates by 20-25 basis points. The rates of bulk deposits are slashed by 10-20 bps across tenures.

In effect, other major banks have also reset their FD rates for different buckets. The banks that revised FD rates include: Axis Bank, HDFC Bank, Punjab National Bank (PNB), Bank of Baroda (BoB), Canara Bank and Kotak Mahindra Bank.

It is highly speculated that banks may soon link savings deposit rates to external benchmarks following the linking of the same with lending rates. This will help in better management of asset liability of the banks.

Revised SBI Domestic Term Deposits Rates for amount below Rs. 2 crore

Maturity Period Revised rates for general public (in %, with effect from 10.09.2019) Revised rates for senior citizens (in %, with effect from 10.09.2019)

7 to 45 Days

4.50

5

46 to 179 Days

5.50

6

180 to 210 Days

5.80

6.3

211 Days to less than 1 year

5.80

6.3

1 to less than 2 year

6.50

7

2 to less than 3 years

6.25

6.75

3 to less than 5 years

6.25

6.75

5 to less than 10 years

6.25

6.75


Rates Source: SBI official website

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