SBI or State Bank of India, the country’s largest lender by assets, on Wednesday announced a reduction its benchmark lending rates by fifteen basis points across all tenors. One basis point is equivalent to 0.01 per cent. The marginal cost of fund-based lending rate, or the MCLR, will now stand at 8.25 per cent for the one-year tenor, down from 8.40 per cent, with effect from August 10, 2019, SBI said in a statement. This is SBI’s fourth consecutive rate cut in the current financial year. With this MCLR cut, the reduction in the home loan rates since April 10 will be 35 basis points, noted SBI.
The development comes after Reserve Bank of India’s Monetary Policy Committee (MPC) delivered its fourth repo rate cut in a row. The MPC cut the repo rate, which is the key interest rate at which it lends short-term funds to commercial banks, by 35 basis points or 0.35 percentage point to 5.40 per cent, the lowest in over nine years.