State Bank of India, the country's largest lender, on Tuesday said it has reduced interest rates on saving accounts by 25 basis points (bps) effective April 15. The public sector lender has also slashed marginal cost-based lending rates (MCLR) by 35 bps across all tenors. One basis points or bps equals to 0.01 per cent.
Following the reduction in rates, SBI savings accounts with balances up to Rs 1 lakh will earn interest rate of 2.75 per cent per annum, down from 3 per cent. For savings account balances above Rs 1 lakh, there will be a similar reduction of 0.25 per cent.
In the press note, SBI said that this is 11th consecutive cut in MCLR in financial year 2019-20. The one year MCLR will now come down to 7.40 per cent per annum from 7.75 per cent, with effect from April 10, 2020.
"Consequently, EMIs on eligible home loan accounts (linked to MCLR) will get cheaper by around Rs 24 per 1 lakh on a 30 year loan," it said.
Given the adequate liquidity in the system, SBI realigned its interest rates on Savings Bank Deposits, with effect from April 15, the lender said.
Last month, SBI sharply reduced the fixed deposit (FD) rates after the RBI, in its 7th bi-monthly monetary policy statement, announced a 75 basis points (bps) cut in repo rate along with 90 bps reduction in reverse repo rate to offset the impact of coronavirus pandemic on the economy. SBI had earlier announced an interest rate cut on FDs on March 10. The bank had reduced domestic retail term deposit (TD) interest rates by 20 bps to 50 bps across tenors and bulk TD interest rates reduced by 50 bps to 100 bps across tenors.
Earlier on Monday, Canara Bank had cut its marginal cost of funds based lending rates (MCLR) on loans and advances across all tenors by up to 35 basis points across tenors, effective April 7.
On Friday, private lender ICICI Bank reduced interest rate on fixed deposits and savings account by up to 50 bps. The reduction in interest rates on savings accounts will be effective from April 9, while new rates on FDs became effective from April 3, 2020.
By Chitranjan Kumar