SBI Customers Alert! New Rules to Come Into Effect from 1st May; Important Things You Should Know

There is a good news for all those who have an account in the State Bank of India (SBI). The country's largest lender is set to introduce some changes or new rules for its consumers from next month, 1^st of May. And these changes will surely benefit its large customers.

In the very first move, the state-owned bank will link its loan as well as deposit rates to the RBI (Reserve Bank of India) repo rate. The new rule is likely to make the loans cheaper or economical for people. SBI said the step is to deal with the inflexibilities in the balance sheet structure and for speedy transmission of changes in RBI's policy rates.

Important things to know about new SBI rules for its customer:

If you are a SBI customer then you must know about all the changes made and new rules that will come into effect from 1^st May 2019.

1.Low interest rates for deposits more than 1 Lakh

All the State Bank of India savings account holders will get low interest on deposits that are above Rs one lakh. For balances up to Rs one lakh, the bank will offer an interest rate of 3.50 % per annum and for deposits more than Rs one lakh, the interest rate will be 3.25 %.

2. Repo rate-interest rate link

The State bank of India will link its main pricing decision for savings bank deposits & short term/duration loans to RBI’s repo rate, with effect from 1^st of May 2019.

Usually most of the banks decide their loan interest rates on the basis of Marginal Cost of Fund Base Lending Rate or the MCLR. They do not pass on the changes in repo rate directly to customers. Nevertheless, State bank of India is the only bank to put into practice the linkage of repo rate to loan interest. The move is expected to make EMIs cheaper.

Following the repo rate cut by the Reserve Bank of India, SBI has cut its interest rate by 10 basis points or 0.10 % on home loans of up to Rs. 30 lakh. The interest rate on State Bank of India home loans or housing loans below Rs 30 lakh currently stands in the range of 8.60 to 8.90 percent.

SBI also cut its benchmark Marginal Cost of Fund Base Lending Rate by 5 basis points (0.05 %) in all tenors. The MCLR now stands at 8.50 % for the one-year tenor.