After BoB & Andhra Bank, State Bank of India cuts base rate to 8.95%

Beena Parmar

Moneycontrol News

Ahead of the monetary policy rate decision, State Bank of India, country’s largest lender, cut base rate by 5 basis points (bps) to 8.95 percent.

One bps is one hundredth of a percentage point.

“Base rate reduced from 09.00 percent p.a. to 8.95 percent p.a. w.e.f. 01.10.2017,” SBI said on its website.

This comes after a couple of other public sector banks including Bank of Baroda and Andhra Bank earlier in the day announced a reduction in their base rates.

Bank of Baroda revised its base rate downwards by 35 bps to 9.15 percent with effect from October 1.

Andhra Bank reduced the rates to 9.55 percent, down by 15 bps from 9.70 percent.

SBI did not revise the MCLR or marginal cost based lending rate, impacting the lending rates on new loans since April 2016.

SBI’s one-year MCLR continues to be at 8 percent, while for three and six-month loans it stands at 7.90 percent and 7.95 percent, respectively. The three-year MCLR is at 8.15 percent.

Last month, Punjab National Bank, one of the large government banks, had cut its base lending rate by 20 basis points (bps) to 9.15 percent from 9.35 percent.

The Reserve Bank of India (RBI) will announce its decision on key policy interest rates on October 4 after a two-day meeting by the monetary policy committee on Tuesday and Wednesday.

Majority experts expect the RBI to keep the key interest rate or the repo rate unchanged at 6 percent.