Biznextindia : Country’s largest lender State Bank of India (SBI) has reduced its Marginal Cost of Funds based Lending rates (MCLR ) by 5-10 basis points (bps) in the shorter tenors i.e. upto 3 months, with effect from 10th July 2020, to boost credit off-take and revive demand. This is 14th consecutive reduction in the Bank’s MCLR. With this revision, SBI’s MCLR upto 3 Months tenor comes down to 6.65% p.a., which is on par with the EBLR of SBI. SBI’s MCLR continues to be the lowest in the market.
MCLR is the minimum lending rate below which a bank is not allowed to lend except in some exceptional cases as authorized by the RBI. Implemented by the RBI on 1st April 2016, MCLR replaced the earlier base rate system to determine the lending rates for commercial banks. It is an internal reference rate for banks to determine the interest they can levy on loans.