SBI reduces MCLR: Country’s largest lender State Bank of India (SBI) on Wednesday announced a reduction in its MCLR by 5-10 basis points in the shorter tenors i.e. up to 3 months, with effect from July 10, 2020, to boost credit off-take and revive demand.
According to the bank’s press release, the new rates will be effective from July 10, 2020, and that it has cut rates of shorter tenor loans to boost credit off-take and revive demand.
According to the SBI press release, “This is the 14th consecutive reduction in the Bank’s MCLR. With this revision, SBI’s MCLR up to 3 months tenor comes down to 6.65 percent p.a., which is on par with the External Benchmark based Lending Rate(EBLR) of SBI.”
SBI’s MCLR continues to be the lowest in the market, as per the release.
In June, the bank slashed its key lending rates, the MCLR and the external benchmark rate (EBR), by 25 basis points and 40 basis points respectively, across tenors. The one-year MCLR had come down to 7 percent per annum.
If your floating rate home loan is linked to MCLR or marginal cost of funds based lending rate, you will have a reset clause and from that date, the new rates will become applicable.
Banks have been cutting their lending rates, citing adequate liquidity.
On Tuesday, private sector lender HDFC Bank cut its MCLR rates across tenors with immediate effect.
Earlier this week, state-run Canara Bank and Bank of Maharashtra announced a reduction in their marginal cost of funds based lending rates (MCLR) by 10 basis points and 20 basis points, respectively, across all tenors, effective July 7. Bengaluru-based Canara Bank cut its one-year MCLR to 7.55 percent from 7.65 percent earlier.