1. News

Latest News !!! State Bank of India Lowers Home Loan Rates Shortly after RBI’s Policy Announcement

Abha Toppo
Abha Toppo

The State Bank of India (SBI) - country's largest bank has cut lending rates, soon after the Reserve Bank of India (RBI) lowered interest rates for the 4th time this year. All other banks are also expected to review their lending rates soon. State Bank of India on 7th August 2019 announced a reduction in its marginal cost of fund based lending rate or MCLR by 15 basis points across all tenors.

The modified rates will be effective from Saturday i.e. 10th August 2019. With the latest reduction, SBI told that home loans linked to MCLR rates have become cheaper by 35 bps since 10 April, 2019.

It further said the one-year MCLR drops down to 8.25 percent per annum, from the previous 8.40 percent.  This is the 4th consecutive reduction in MCLR in Financial Year 2019-20 by the bank.

Yesterday, the six-member monetary policy committee (MPC) of the Reserve Bank of India had reduced the repo rate by a 35 basis points (which was bigger than expected) to 5.40 percent. The Central bank also maintained its ‘accommodative’ position.

SBI since 1st July 2019, had started offering a repo rate-linked home loan product. The interest rate on this new home loan product gets modified automatically whenever there is a change in the repo rate.

SBI FD Rates

Just few days back i.e. on 1st August 2019, it had revised fixed deposit rates, lowering interest rates on FDs by 20 to 75 basis points.

SBI Interest Rate on Large Savings

From 1st May 2019, the State Bank of India has linked interest rate on large saving account deposits (above Rs. 1 lakh) to repo rate. The bank’s large savings accounts now give an interest rate 275 bps lower than RBI's repo rate. This means that the interest rate on large SBI savings accounts will automatically drop to 2.65 percent. SBI savings accounts with deposits less than Rs. 1 lakh will continue to get 3.5 percent interest rate.

With the latest cut in the RBI's repo rate, State Bank of India’s effective Repo Linked Lending Rate or RLLR for cash credit or overdraft customers will stand revised to 7.65 percent.

Moreover, SBI from 1st May this year had linked the interest rate on charged on cash credit or overdraft facilities with limits more than Rs.1 lakh to repo rate.

Like this article?

Hey! I am Abha Toppo. Did you liked this article and have suggestions to improve this article? Mail me your suggestions and feedback.

Share your comments

Subscribe to our Newsletter. You choose the topics of your interest and we'll send you handpicked news and latest updates based on your choice.

Subscribe Newsletters