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State Bank of India on Tuesday said it will pare its marginal cost of funds based lending rate (MCLR) by 5 basis points (bps) across all tenors with effect from July 10.
This move comes in the backdrop of the Reserve Bank of India cutting its policy repo rate by 25 basis points from 6 per cent to 5.75 per cent last month.
Following the cut, SBI’s new one-year benchmark MCLR will be 8.40 per cent against 8.45 per cent. As a result, interest rates on all loans linked to MCLR stand reduced by 5 bps with effect from July 10.
One basis point equals one-hundredth of a percentage point.
All rupee loans sanctioned and credit limits renewed with effect from April 1, 2016 are priced by banks with reference to MCLR, which is the internal benchmark for such purposes.
SBI, in a statement, said: “This is the third rate cut in the current financial year. With today’s MCLR cut, the reduction in the home loan rates since April 10, 2019 is 20 bps.”
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