India’s top lender State Bank of India (SBI) has decided to cut its Marginal Cost of Funds based Lending Rate (MCLR) by five bps across all tenors. With this, now the MCLR has come to 7.85 per cent per annum from 7.90 per cent per annum. This is the ninth cut in a row in MCLR in financial year 2019-20, the bank said in a statement.
SBI has also decided to cut in the retail fixed deposits or FD rates.
The reduction in MCLR and FD rates will come into effect from February 10.
SBI’s announcement comes a day after the RBI left the repo rates unchanged at 5.15 per cent, but its long-term repo operation for up to Rs 1 lakh crore made the cost of funds cheaper for banks.
Marginal Cost of Funds-based Lending Rate (MCLR) is the minimum lending rate below which a bank is not permitted to lend.
“In view of the surplus liquidity in the system, the SBI realigns its interest rate on Retail Term Deposits (less than Rs 2 crore) and Bulk Term Deposits (Rs 2 crore & above) from February 10, 2020. The bank slashed the Term Deposits rates by 10-50 bps in the Retail segment and 25-50 bps in the Bulk segment,” an SBI statement said.
The bank has cut the FD rates across all tenors, except for those with maturity period between 7 to 45 days.
For FDs maturing within 46 to 179 days, the SBI has cut the interest rate sharply by 50 basis points (bps). Now, these deposits will fetch an interest rate of 5 per cent. Other FDs maturing within 180 to 210 days and 211 days to less than 1 year, the SBI will give an interest rate of 5.50 per cent.
Earlier, the lender was offering 5.80 per cent on these deposits.
The bank has slashed the interest rate by 10 bps on deposits maturing in one year to 10 years. These deposits were previously fetching 6.10 per cent interest, with the new updates, it will now be get a 6 per cent interest.
After the latest rate cut by the SBI for senior citizens, deposits maturing in 46 to 179 days will fetch 5.50 per cent returns.
For FDs maturing in 180 to 210 days as well as 211 days to less than one year, the SBI will offer an interest rate of 6 per cent. After the latest revision, the SBI will give 6.50 per cent interest to senior citizens for maturity periods between one year and 10 years.
(With input from agencies)