Public sector lender State Bank on Monday announced yet another reduction in lending rates by 10 basis points across tenors.

The new rates are effective Tuesday, the lender said announcing the third rate reduction in the current fiscal year.

One year MCLR, to which all the retail lending rates are linked to, has been reduced to 8.15 percent from 8.25 percent earlier.

It also slashed retail term deposit rates by 20-25 bps and bulk term deposit rates by 10-20 bps across tenors, effective Tuesday.

The lender attributed the falling interest rate scenario and surplus liquidity for realigning its interest rate on term deposits.