SBI, which accounts for more than a fifth of India's banking assets, will lower the 1-year MCLR to 7.95 percent from 8 percent, according to a notification on Tuesday.
The RBI last year unveiled the MCLR, which sought to remove much of the discretion commercial banks have to set lending rates. But to its frustration, the pace of bank lending rate cuts has lagged the reduction in policy rates, which fell by a total 200 basis points since January 2015.
The RBI is keen for banks to lower lending rates further to accelerate credit growth and private investment in an economy growing at its slowest in more than three years. Bank loans last financial year grew at their slowest pace in more than six decades.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
Get Breaking news, live coverage, and Latest News from India and around the world on NDTV.com. Catch all the Live TV action on NDTV 24x7 and NDTV India. Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.