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SBI reduces MCLR by 15 bps across all tenors

The 1 Year MCLR would come down to 8.25% p.a from 8.40% p.a. with effect from 10th Aug 2019.

ET Online|
Updated: Aug 07, 2019, 02.16 PM IST
Less than two hours after the Reserve Bank of India (RBI) cuts key policy rates by 35 basis points (bps), the country's largest lender State Bank of India (SBI) has announced a cut in its MCLR (marginal cost based lending rates). According to the bank's press release, it has cut rates by 15 bps across all tenors with effect from August 10, 2019. The 1 Year MCLR would come down to 8.25% p.a from 8.40% p.a. with effect from 10th Aug 2019.

According to the press release, this is the fourth consectuve cut in MCLR by the SBI in FY 2019-20. One year MCLR will become 8.25 per cent per annum with effect from August 10, 2019. With today's MCLR cut, home loans have become cheaper by 35 bps since April 10, 2019.

Previously, SBI has reduced the MCLR rate by 5 bps post the June Monetary policy of RBI. One basis point is equivalent to one-hundredth precentage.

MCLR effective from August 10
Tenor Existing MCLR (In %) Revised MCLR (In %)
Over night 8.05 7.90
One Month 8.05 7.90
Three Month 8.10 7.95
Six Month 8.25 8.10
One Year 8.40 8.25
Two Years 8.50 8.35
Three Years 8.60 8.45

SBI had announced in June that it will start offering repo-linked home loan product with effect from July 1, 2019. With today's cut in the Policy rate, SBI's effective Repo Linked Lending Rate (RLLR) for CC/ OD customers will stand revised to 7.65% w.e.f. 01.09.2019.

SBI also stated in its press release that it has effected full transmission of Repo rate cuts by RBI and has passed on the benefit of Repo rate reduction by 85 bps during the current financial year to its CC/OD customers with Limits above Rs.1 lakh.

Now it is to be seen whether other banks will follow the suit in cutting rates.

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