SBI CUTS RATES FOR THE FIFTH TIME THIS FISCAL

MUMBAI: State Bank of India (SBI) Monday cut its lending and deposit rates across all tenures, the second such reduction in the past one month. The country’s largest bank said it has reduced lending rates by 10 basis points (bps) across all tenors. The oneyear marginal cost of lending rate (MCLR) will stand reduced to 8.15% from 8.25% with effect from September 10.

This will be the fifth consecutive cut in MCLR in FY20.

SBI also reduced its deposit rates by 20-25bps and bulk deposit rates by 10-20bps across tenures. “In view of the falling interest rate scenario and surplus liquidity, SBI also realigns its interest rate on term deposits w.e.f. September 10,” the bank said.

The linking of retail floating loans to an external benchmark kicks in from October , which will be applicable to new loans. SBI’S reduction of its MCLR rate is to keep retail interest sticky during the intervening period. “Liquidity position has been comfortable for the bank. Depending on the banks’ requirement of funds, we have been reducing MCLR and also repo-linked rates. We are hoping that this will spur some demand during the festive season ,” said pr ave en kumar gupta, managing director, retail and digital banking, SBI.

“The bank (SBI) has increased the transmission of monetary policy by reducing MCLR by 25bps again over the last 1 month. Further, it has reduced deposit rates in different buckets so that margins remain intact. However, we see margin pressure in the second half of the current financial year,” said Asutosh Mishra, head of institutional research, Ashika Stock Broking. Separately, Bajaj Housing Finance Monday announced a cut in home loan rates from 8.8% to 8.6% for amounts of up to ₹30 lakh.