Country’s largest lender State Bank of India (SBI) on Monday announced its fifth consecutive reduction in MCLR so far the financial year 2019-20 o better utilise the excess liquidity.
It has made a reduction in its marginal cost-based lending rate (MCLR) by 10 basis points (bps) and also lowered interest rates on fixed term deposits across all maturities by up to 25 basis points.
With this lending rate reduction, the bank has lowered 40 bps so far this financial year in five successive rate cuts beginning April.
After the reduction, the one year MCLR based lending rate will come down to 8.15%.
The new rates are effective from 10 September 2019.
Tenor wise MCLR effective from 10th September, 2019 are as under:
|Tenor||Existing MCLR (%)||New MCLR (%)|
Going through the HDFC Bank and ICICI Bank rates, it offers 8.30% and 8.35%, respectively, after their 10 bps reduction in the past two weeks.
The Reserve Bank of India (RBI) has been unhappy about banks’ pace of transmission on rate cuts under the regime of base rates and MCLR. The rates are set based on internally decided benchmarks; transparency with the public has also been an issue here.