SBI reduces MCLR by up to 10 bps: Check new rates

State Bank of India has reduced its MCLR on Wednesday morning. The bank in a statement said that the MCLR will be reduced by 5-10 basis points in the shorter tenors i.e. up to 3 months. The new rates come into effect from July 10, 2020. However, the 1-year MCLR remains the same and hence this reduction will not impact home loan borrowers as such loans are linked to the 1-year MCLR of the bank. 

SBI said that the decision has been taken 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. Details are being made available on the Bank’s web site,” the bank said in a statement.

MCLR is Marginal Cost of Funds based Lending Rate and is an internal benchmark of the funds largely representing the cost of funds for a bank.

WATCH Zee Business TV LIVE Streaming Online

This comes a day after HDFC Bank has cut its MCLR by 20 bps. The rate cut will be applicable across all tenors with effect from today (July 7). The move will impact those home loan borrowers who have floating home loan rates. The reduction comes in line with the repo rate cuts announced by the Reserve Bank of India (RBI) to provide banks with liquidity to encourage them to lend to borrowers at cheaper rates and push economic growth.

Several other banks have taken similar decisions in the recent past. State-run Canara Bank and Bank of Maharashtra on Monday announced reduction in their marginal cost of funds based lending rates (MCLR) by 10 basis points and 20 basis points, respectively, across all tenors, effective July 7.

Meanwhile, Bengaluru-based Canara Bank had also cut its one-year MCLR to 7.55 per cent from 7.65 per cent earlier. Overnight and one-month lending rates have been cut by 10 basis points to 7.20 per cent each. Three months MCLR rate has been revised to 7.45 per cent from 7.55 per cent.