SBI Lowers Lending Rates By 5 Basis Points
A day after Reserve Bank governor Shaktikanta Das said he expects faster transmission of the three successive repo rate cuts, State Bank of India lowered its lending rates by 5 basis points across all tenors.
The new rates, effective Wednesday, is the third reduction by SBI in this financial year having cut the rates by 5 basis points each in April and May, while its home loan rates has come down by 20 basis points during this period.
The one-year marginal cost of funds-based lending rate or minimum lending rate, to which all loans are linked, has been cut to 8.40 percent from 8.45 percent, the nation's largest lender said in a statement Tuesday.
From July 1, the bank had also introduced repo-linked home loan products.
Talking to reporters after the customary post-budget meeting with the finance minister on Monday, Das had said after delivering three back-to-back rate cuts to the tune of 75 basis points, RBI expects a quicker transmission by banks.
“At the June MPC meeting, I had said by that time 50 basis points of repo rate cut had already been announced, only 21 basis points had been transmitted. But one positive thing that is happening now is, earlier it used to take six months for transmission, now it is taking a much shorter period of two- three months,” Das had said.
“Thereafter, we announced 25 basis points cut more. So, it's now a cumulative 75 basis points cut. We are collecting the data and also you have to keep in mind that right from June, the system has more than adequate surplus liquidity,” he had said.
After the 25 basis points repo rate cut in the June policy, Bank of Maharashtra, Corporation Bank, Oriental Bank and IDBI Bank had reduced their MCLR by 5-10 basis points.
The next meeting of the monetary policy committee is scheduled for August 5-9, when majority of analysts expect another rate cut.