Home Loans to Become Cheaper as SBI Slashes MCLR Again

State Bank of India (SBI), the largest lender in the country, has reportedly lowered its Marginal Cost of Funds based Lending Rate (MCLR) by five basis points (bps) across all maturities.

The one-year MCLR on which retail loans such as home loans and auto loans are benchmarked have been reduced by five bps from 7.85% p.a. from the previous 7.90% p.a.

According to the State Bank of India’s official statement, the revised MCLR will be effective from 10 February 2020. A reduction in the MCLR means that retail loans like housing loans and vehicle loans will become more affordable to loan borrowers.

This is the ninth consecutive month the nation-wide lender has decided to slash its MCLR during FY 2019-20. In the same line, SBI has also reportedly reduced the interest rate on retail and bulk term deposits across various maturities.

SBI announced that the interest rate on term deposits had been reduced by 10-15 bps across the tenors.

Also Read: Claim benefits of the deduction for a home loan and HRA

The revised interest rates on Bulk Term Deposits, i.e. deposits of Rs 2 crore or more and Retail Term Deposits, i.e. lower than Rs 2 crore will come into effect from 10 February 2020.

The lender also added that the surplus funds on which it was sitting on were the reason why the interest rates were being slashed.

According to reports, Retail-Personal Advances which grew by over 17% in 2019 led to the lender’s credit surging by over 6.8% to Rs.23,01,669 crore during the same period.

December 2019 witnessed bank deposits surging to Rs 31,11,229 crore as SBI registered an increase of 9.9% in deposits during the previous 12 months.

According to a recent report released by the Reserve Bank of India, the system has been able to maintain surplus funds, ensuring enough liquidity in the system during the last two months.

For any clarifications/feedback on the topic, please contact the writer at viswanathan.v@cleartax.in.

You May Also Like

EPFO lowers the interest rate on PF deposits to 8.5% for FY 2019-20

The Employees’ Provident Fund Organisation (EPFO) has notified the interest rate for…

Pensioners Who Opted for Commutation To Receive Higher Pension

According to a notification sent by the labour ministry dated 20 February…

Income Tax Not Applicable on Disability Pension for Defense Personnel

The Ministry of Defence has instructed its accounts department to withdraw the…

Here’s What You Should Know About Overdraft Facility

The overdraft facility can be considered as a kind of a loan.…