RBI policy review: SBI cuts loan rates by 15 bps, others likely to follow

SBI reduced its marginal cost of funds-based lending rate from 8.4% to 8.25%

Following an unconventional cut of 35 basis points (bps) in the policy repo rate by the Reserve Bank of India (RBI) wasted no time in reducing the benchmark lending rate by 15 bps. This is likely to have a domino effect and prompt banks to pare their rates. 

Already, the State Bank of India (SBI) reduced its marginal cost of funds-based lending rate (MCLR) from 8.4 per cent to 8.25 per cent, effective August 10, following the monetary policy committee’s (MPC’s) decision to take the policy rate to a nine-year low. 

“We expect higher transmission of monetary policy actions and stance by