State Bank of India (SBI) on Wednesday announced a cut in its marginal cost-based lending rates (MCLR), a move that will make car and home loans cheaper from August 10 as these loans are MCLR-linked.
The country's largest lender said in a statement that it has cut rates by 15 basis points (bps) across all tenors with effect from August 10. The one year MCLR will come down to 8.25 per cent per annum from 8.4 per cent per annum, it said within hours after the Reserve Bank of India (RBI) cut key policy rates by 35 bps.
This is the fourth consecutive cut in MCLR by the SBI in FY 2019-20. With today's MCLR cut, home loans have become cheaper by 35 bps since April 10, 2019.
The bank had announced in June that it will start offering repo-linked home loan product from July 1. A repo rate-linked home loan means that any changes in key interest rate by the RBI are passed on directly to customers.
With today's MCLR cut, home loans have become cheaper by 35 bps since April 10. Previously, SBI has reduced the MCLR rate by 5 bps post the June monetary policy of RBI. One basis point is equivalent to one-hundredth percentage.
"SBI has effected full transmission of repo rate cuts by RBI and has passed on the benefit of repo rate reduction by 85 basis points during the current financial year to its cash credit and overdraft customers with limits above Rs 1 lakh," it said.
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