New Delhi, October 09: Making money available to customers at more ease, the largest lender in India, the State Bank of India on Wednesday moved up reducing its marginal cost of fund based lending (MCLR) rate by 10 basis points across all tenors, effective October 10.
This is probably after the Reserve Bank of India last week in its MPC reduced the repo rate by 25 basis points for the fifth consecutive time in a row. However this is the sixth time that the country's largest lender has cut its MCLR or minimum lending rate in the current financial year.
"The rate reduction is not applicable to the repo-linked loans. In view of the festival season and extending the benefits to customers across all segments, we have reduced our MCLR by 10 bps across all tenors," the bank said in a statement.
With this reduction, the one year MCLR, to which all the lending rates are linked to, is set at 8.05 per cent as against 8.15 per cent earlier. MCLR rates are based on the bank's own cost of funds. If your home loan is linked to SBI's MCLR rate, the latest cut may not bring down your EMIs immediately. MCLR-based loans typically have a one-year reset clause.
SBI charges a spread of 265 basis points over the RBI's repo rate, currently at 5.15% to calculate its external benchmark-based lending rate. SBI also charges a premium for effective home loan rate.