HYDERABAD: The State Bank of India (SBI) on Tuesday reduced its marginal cost of funds-based lending rate (MCLR) by 35 basis points across all tenors. The one-year MCLR will be effective from April 10.This is the bank’s eleventh consecutive cut in MCLR in the past one year and the same now stands at 7.4 per cent per annum, down from 7.7 last year, SBI said in a statement. “EMIs on eligible home loan accounts (linked to MCLR) will get cheaper by around Rs 24 per Rs 1 lakh on a 30 year loan,” the bank added.

Likewise, it also reduced interest rates on savings bank deposits by 25 basis points with effect from April 15. The revised savings deposit rate now stands at 2.75 per cent from 3 per cent earlier.This means, interest rates for balances up to Rs 1 lakh and above Rs 1 lakh will now earn 2.75 per cent interest as against the earlier 3 per cent.

It may be noted that last month, SBI reduced fixed deposit interest rates following the RBI’s repo reduction of 75 basis points.It also reduced domestic retail Term Deposit (TD) interest rates by 20 basis points to 50 basis pointsacross tenors and bulk TD interest rates reduced by 50 basis points to 100 basis points across tenors.

As for interest rates, the reduction is significant on the bank’s external benchmark rates (repo rate linked rates), which saw a reduction of 75 basis points at once. With this, the effective interest rate on home loans linked to external benchmark repo is down to 7.1 per cent, a historic low.Other banks too are expected to cut MCLR in the days to come.