Mumbai: The State Bank of India (SBI) has cut interest rates on loans and fixed deposits a day after the Reserve Bank of India’s (RBI) monetary policy announcement.
This is good news for SBI customers as home and automobile loans will be now cheaper. Besides interest rates on loans, the top public lender in India has also slashed rates on fixed deposits.
SBI announced Friday a reduction in marginal cost-based lending rate (MCLR) by five basis points or 0.05 per cent across all tenors. This will come into effect from February 10.
It is worth mentioning that it is the ninth rate cut by SBI in the current fiscal. The one-year MCLR has now come down to 7.85 per cent from the earlier 7.90 per cent.
While SBI’s interest rate cut will benefit its customers, it is likely that interest rates on home loans will further reduce due to the impact of delayed transmission of RBI’s past rate cuts.
RBI, however, kept the repo rate unchanged in its sixth bi-monthly policy review but announced a few measures to boost credit, which could lead to a further reduction in interest rates.
As far as FD is concerned, the interest rate has been reduced from 10 basis points to 50 basis points. As a result of which the interest rate will come down to 6.10% for all FD term deposits between one to 10 years. However, there will be some concession for senior citizens. The new rate will be implemented from February 10 onwards.
However, FD terms ending between the next seven to 45 days will not be affected by the new rates.
Agencies