SBI Cuts Lending Rates By 10 Basis Points, Savings Deposit Rates By 25 Basis Points
Less than a week after the Reserve Bank of India lowered the benchmark borrowing rate, State Bank of India cut lending and deposit rates across maturities citing adequate liquidity in the system.
SBI, India’s largest lender, reduced the marginal cost of funds-based lending rate by 10 basis points, according to its statement. The one-year MCLR will be 8.05 percent from Thursday.
Ending a pause announced on Aug. 23 to protect interests of small borrowers, SBI also cut the savings account rate by 25 basis points to 3.25 percent for accounts with deposits up to Rs 1 lakh. The new rate will be applicable from Nov. 1. The rate for savings deposits above Rs 1 lakh remains unchanged at 3 percent.
The reduced rates follow a 25-basis-point cut in the repo rate announced by India’s Monetary Policy Committee on Oct. 4—the panel has reduced the benchmark rate by 135 basis points so far this year to spur growth.
SBI had linked its savings accounts to the repo rate starting May 1. It’s the only bank to have linked the savings deposit rate to the repo rate ahead of announcing its external benchmark-linked lending rates for retail borrowers and small businesses. That’s expected to help the bank manage its asset-liability mismatches better.
SBI on Wednesday also announced that it will cut interest rates on retail term deposits and bulk deposits with one- to two-year tenors by 10-30 basis points.