State Bank Of India (SBI) Cuts Home, Car Loan, Fixed Deposit Rates

Last month, the RBI maintained the status quo on monetary policy amid high inflation, in line with economists' expectations.

State Bank Of India (SBI) Cuts Home, Car Loan, Fixed Deposit Rates

Highlights

  • SBI drops marginal cost of funding-based lending rates 10-15 basis points
  • SBI reduces the fixed deposit (FD) rates by 10-50 basis points
  • New rates for home loans and fixed deposits will take effect on March 10

State Bank of India (SBI) on Wednesday announced a reduction in its MCLR or marginal cost of funding-based lending rates by 10-15 basis points across tenors, and a cut in its fixed deposit interest rates. That marked the tenth cut in the MCLR so far in the current fiscal year. The bank said the new rates for home loans and fixed deposits will take effect from March 10. With the latest revision, the one-year MCLR comes down to 7.75 per cent from 7.85 per cent with effect from March 10, 2020, SBI said in a press release.

Consequently, EMIs on eligible home loan accounts (linked to MCLR) will come down by around Rs 7.00 per 1 lakh on a 30-year loan, SBI said. It also said that EMIs on car loans will also be reduced by Rs. 5.00 per 1 lakh on a seven-year loan.

SBI also lowered its fixed deposit (FD) rates by 10-50 basis points citing "adequate liquidity in the system". The country's largest bank by assets said it had reduced the interest rates applicable to retail term deposit (fixed deposit) by 10 bps for maturities of one year and above, and by 50 bps for those up to 45 days.

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SBI also reduced bulk FD rates by 15 bps for deposits with tenors of 180 days and above.

Last month, the RBI kept key lending rates steady and left the door open for more monetary easing as it sought to support faltering economic growth and avoid stoking already heightened inflation levels.