Mumbai : A day after RBI maintained status quo, State Bank of India (SBI) India’s largest lender, announced reduction a reduction in its benchmark lending rates across all tenors. SBI said its marginal cost of funds-based lending rate (MCLR) will be reduced by 5 basis points (0.5 percentage point), and the new rates will take effect on February 10. This is the ninth consecutive lending rate reduction by the bank in the current financial year.
“From February 10, the MCLR will stand reduced to 7.85 per cent for the one-year tenor, as against the existing 7.90 percent” SBI said in a statement. SBI also announced a cut in interest rates applicable to retail term deposits or fixed deposits by 10-50 bps and bulk term deposits by 20-50 bps across tenors, according to the statement.
After interest rate revision by SBI, other banks are likely to follow the suit. Interestingly, another public sector bank Canara Bank had announced reduction in its MCLR just before the announcement of RBI Credit policy on Thursday.
The Reserve Bank of India Monetary Policy Committee (MPC) on Thursday had decided to keep the Repo rate unchanged at 5.15%. Consequently, the reverse repo rate under the LAF has remained unchanged at 4.90 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 5.40 per cent.