Country's largest lender State Bank of India on Monday announced the reduction in its marginal cost of fund based lending rate (MCLR) by 10 basis points across all one-year products, effective Tuesday. This is the eighth consecutive cut in MCLR by the lender this fiscal.
"To pass on the benefit of our falling cost of funds to customers, we have reduced MCLR by 10 bps across all tenors," a statement from the bank said.
The new one-year MCLR has been cut to 7.90 per cent from 8 per cent. The bank's release also suggested that this is the eighth consecutive reduction in MCLR in this financial year.
The development comes after RBI's Monetary Policy Committee (MPC) decided to keep the key lending rate unchanged after five consecutive rate cuts since January 2019. As a result, the key repo rate continues to remain unchanged at 5.15 per cent.
RBI Governor Shaktikanta Das said the review committee did not go for another rate cut as it wants more clarity on the fiscal situation and also wants better transmission of its previous rate cuts. However, Das made it clear that the RBI will maintain an accommodative stance, allowing it room for rate cuts in future.
SBI, however, has not cut interest rates on its repo-linked loans and it has not reduced its fixed deposit rates as well.