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SBI cuts loan rates by 5 bps: 5 things you must know

Apr 10, 2019, 11:20 AM IST
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Country's largest public sector lender State Bank of India has followed its smaller peers to cut the lending rates by 5 basis points across all tenors with effect from April 10. This is the bank's first rate cut announcement since November 2017. The reduction in lending rate by the bank follows a cumulative 50 basis points cut in repo rate by the RBI in its last two monetary policy review meeting.

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SBI's new one-year marginal cost of funds-based lending rate (MCLR) is now down to 8.50 percent from 8.55 percent earlier. This is the first reduction in MCLR by SBI in the last 17 months. (Reuters)

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The SBI has also re-priced home loans up to Rs 30 lakh by 10 bps. Accordingly, interest rate on housing loans of such ticket size will now be in the range of 8.60-8.90 percent now, down from 8.70-9 percent. (Reuters)

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SBI is the third state-run lender to lower the lending rates after Indian Overseas Bank Tuesday and Bank of Maharashtra which also lowered their loan prices by 5 bps on loan tenors of one year and above, effective April 10. (Reuters)

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While IOB said it has cut MCLR for one-year loans to 8.65 percent from 8.70 percent earlier, BoM had on April 5, a day after the RBI action, had cut MCLR rates by 5 basis points across various tenors. The Pune-based BoM had reduced its one-year lending to 8.70 percent from 8.75 per cent. (PTI)

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Last month SBI was first to link its short-term loans and large savings deposits rates to the repo rate from May 1. For balances up to Rs 1 lakh, the savings bank rates would be 3.50 percent, while for balances above Rs 1 lakh effective rate would be 3.25 percent. The bank had linked all cash credit accounts and overdrafts with limits above Rs 1 lakh to the repo rate plus a spread of 2.25 percent. (Reuters)

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