SBI cuts savings deposit rate to 2.75%, lowers lending rates
1 min read . Updated: 07 Apr 2020, 08:16 PM IST- The one-year MCLR comes down to 7.40% from 7.75% with effect from 10 April
- The cut in savings deposit rates will be effective from 15 April
MUMBAI : State Bank of India (SBI) on Tuesday lowered its savings deposit rates by 25 basis points (bps) to 2.75%, citing adequate liquidity. The cut will be effective from 15 April.
On 11 March, SBI had lowered its savings bank interest rate to 3% for all customers. Earlier, it used to offer 3.25% on balances of up to ₹1 lakh, and 3% on above ₹1 lakh. Last month, it had also waived off maintenance of average monthly balance (AMB) for all savings bank accounts.
On Tuesday, the bank also announced a reduction in its marginal cost of funds-based lending rate (MCLR) by 35bps across all tenures. “The one-year MCLR comes down to 7.40% from 7.75% with effect from 10 April. This is the eleventh consecutive cut in MCLR in FY20." Equated monthly instalments (EMIs) on eligible home loan accounts (linked to MCLR) will get cheaper by around ₹24 per ₹1 lakh on a 30-year loan.
However, the reduction will not affect retail loans disbursed after 1 October 2019, when banks had moved to an external benchmark as directed by RBI. Banks can now choose between the repo rate, or the yield on three-month or six-month treasury bills, or any other benchmark rate published by the Financial Benchmarks India Pvt. Ltd. The move will help existing SBI retail customers who borrowed before October 2019, and corporate loans, which are yet to move to an external benchmark.
On 27 March, SBI had lowered its interest rates linked to external benchmarks by 75bps and cut its deposit rates between 20 and 100bps. In a statement, SBI had said its external benchmark-linked lending rate (EBR) and repo-linked lending rate (RLLR) now stand at 7.05% and 6.65%, respectively. This was after the RBI reduced its repo rate by 75bps to mitigate covid-19 challenges.
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