SBI Cuts MCLR Again: Home Loan Gets Cheaper Across All Tenures

Bringing yet another cheer to Home Loan borrowers, the largest lender of the country, State Bank of India (SBI), has announced another reduction in Marginal Cost-Based Lending Rate (MCLR) by 5 bps across all tenures on Friday.

“The 1-year MCLR will come down from 8.5 percent per year to 8.45 percent,” stated the SBI press release. The new rates will come into effect from 10 May, 2019.

This is the second rate cut by the lending major after the Monetary Policy Review last month. Soon after the MPC meet, the bank had reduced MCLR by 5 bps as a response to repo rate cut. The overall reduction in the home loan rates in the last one is 15 bps for various tenures.

The bank has already reduced Home Loan Interest Rates by 10 bps for small loans up to Rs. 30 lakh.

SBI MCLR Rates

MCLR Trends in 2019

The Reserve Bank of India has cut repo rate by 50 basis points consecutively in its February and April MPC meets. Most banks and lenders have been gradually passing on this rate cut benefit to the customers.

Besides SBI, other lending majors such as HDFC Bank and Punjab National Bank have also reduced MCLR in the past month. However, state-owned Bank of Baroda (BoB) has hiked its MCLR by 0.05 per cent w.e.f. May 7. The BoB had earlier reduced its loan rates by 10 bps in March 2019. Other banks are also expected to follow the suit following the rate cut by SBI.

Also Read : SBI Cuts Down MCLR Based Lending Rates; Home Loans to be Cheaper from April 10

SBI is the largest lender of the country with a gigantic domestic network of 22,000 branches and over 58,000 ATM / CDM network.

From May 1, SBI had moved to a new interest rate regime for large deposit accounts and short-term loans. SBI’s Savings Account with over Rs1 lakh balance and short credit accounts like overdraft facility and cash credit facility are directed linked RBI’s repo rate. That is, interest rates for large SBI savings accounts and short-term credit facilities will change with revision in RBI’s repo rate. In effect, RBI’s policy rates will be automatically linked into the banking system, sending faster benefit to the customer.