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State Bank of India on Monday announced a 30-basis-point cut in old lending rate benchmarks — Base Rate and Benchmark Prime Lending Rate — in a bid to bring new year cheer to customers whose loans are still linked to these benchmarks. With effect from January 1, 2018, the revised base rate is 8.65 per cent (8.95 per cent earlier) for existing customers and Benchmark Prime Lending Rate is 13.40 per cent (13.70 per cent).
In terms of regulatory requirements, all rupee loans sanctioned by banks with effect from April 1, 2016 are priced with reference to the marginal cost of funds based lending rates (MCLRs). Existing borrowers have an option to switch over to interest rates linked to MCLR (other than fixed rate loans).
While SBI pared the old lending rate benchmarks, it left MCLR across all tenors unchanged. The benchmark one-year MCLR is 7.95 per cent. Additionally, SBI has decided to extend its ongoing waiver on home-loan processing fees till March 31, 2018 for new customers keen on buying a house and other customers looking to switch their existing loans to SBI.
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