State Bank of India, the country's biggest lender has announced a cut in marginal cost of funds-based lending rate (MCLR) by 10 bps for its 1 year MCLR. The change in the rate would be effective from December 10.
The latest MCLR rate cut is the eighth consecutive cut in MCLR this fiscal. After the cut, SBI's one-year MCLR has come down from 8 per cent per annum to 7.90 per cent per annum. The MCLR rate has remained 7.65 per cent in the overnight and one month tenors, 7.70 per cent in the three month tenor, 7.85 per cent in the six month tenor, 8.10 per cent in the two years tenor and 8.20 per cent in the three years tenor.
The bank has said that it continues to be the cheapest loan provider in the country. It said that it commands 25 per cent of the market share in home as well as auto loans. The rate cut is meant to pass on the benefit of its reducing cost of funds to the customers, stated the bank. The bank has not cut interest rate on its repo linked loans or reduced fixed deposit rates.
The RBI Governor in the recent monetary policy meet had said that the apex bank is not in a hurry to reduce interest rates further. The RBI has reduced repo rate by 2.85 per cent from 8 per cent in January 2014 to 5.15 per cent in October 2019. But banks have not transferred this rate cut in entirety to consumers.