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SBI reduces one-year MCLR by 10 bps

According the bank’s press release, this is its eighth consecutive MCLR cut this financial year.

ET Online|
Updated: Dec 09, 2019, 12.35 PM IST
SBI reduces MCLR by 10 bps across all tenors
Just a few days after the Reserve Bank of India maintained status quo on key rates, the country’s largest lender, State Bank of India (SBI) announced a reduction in its one-year lending rate. SBI announced on Monday that it has cut one-year marginal cost-based lending rates (MCLR) by 10 bps. The one-year MCLR will come down to 7.90 percent from 8 percent. The new rates will be effective from December 10. All the other rates remain the same.

According the bank’s press release, this is its eighth consecutive MCLR cut this financial year.

The bank has not cut interest rate on its repo linked loans, nor has it reduced fixed deposit rates.

The RBI governor, Shaktikanta Das during the monetary policy press briefing said that although it is not in a hurry to keep reducing interest rates, it would work to ensure that the transmission turns more effective since much needs to be passed on.

Monetary transmission has been full and reasonably swift across various money market segments and the private corporate bond market. As against the cumulative reduction in policy repo rate by 135 bps during February to October this year, transmission to various money market and corporate debt market segments ranged from 135 bps with respect to overnight call money market to about 218 bps with respect to month CPs of NBFCs, according to RBI.

But the full impact on lending rates is still playing out. Till now it is 44 bps with regard to new loans. “Transmission is set to improve with the introduction of external benchmark system as most banks have linked their lending rates to the repo rate,” Das said.

Also Read

Bank of Maharashtra cuts MCLR by up to 45 bps

Indian Bank to revise MCLR from January 3

Allahabad Bank cuts MCLR by 5 bps

HDFC Bank cuts MCLR by up to 15 bps

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