SBI Cuts Lending And Deposit Rates For Second Time In Over A Month
India’s largest lender has cut the one-year marginal cost-based lending rate to 8.15 percent from 8.25 percent.
State Bank of India said today it’s reducing lending and deposit rates across maturities the second time in over a month after the central bank’s Monetary Policy Committee cut its benchmark interest rate for the fourth time this year.
India’s largest lender has cut the one-year marginal cost-based lending rate to 8.15 percent from 8.25 percent. The bank had last lowered its MCLR by 15 basis points on Aug. 7—on the day the MPC cut the repo rate by 35 bps.
Retail term deposit rates across maturities will be cut by 20-25 bps, while bulk deposit rates will be lowered by 10-20 bps, the bank said. All rate changes will be effective from Tuesday.
Deposit rates for retail customers with maturities under one year have been lowered by 20 bps to 6.3 percent, while those with maturities between one year and two years have been reduced by 20 bps to seven percent. Deposits with maturities between two years and 10 years will be priced at 6.75 percent compared with the previous seven percent. The bank had last cut retail deposit rates by 10-50 bps and bulk deposit rates by 30-70 bps on Aug. 23.
The repo rate cut should have translated into SBI’s savings account rate being cut to 2.65 percent, as the bank had earlier linked the two. However, the bank chose to keep its savings account rate at 3 percent, for customers with deposits over Rs 1 lakh, in a bid to protect its customers.
Lowering deposit rates helps banks to manage its operating costs, which then allows it to lower its lending rates as well. As on June 30, SBI had a domestic advances book of Rs 19.28 lakh crore and deposits worth Rs 28.5 lakh crore.