Within hours of a steeper-than-expected 35 basis points reduction in the repo rates by the Monetary Policy Committee to 5.4 percent in its fourth consecutive step, the largest lender State Bank of India announced a 15 basis points reduction in its lending rates, effective Aug. 10 across all tenors.
The new one-year marginal cost of funds based lending rates will come down to 8.25 percent from 8.40 percent annum, the lender said in a statement.
With this reduction, the bank's effective repo-linked lending rate for cash credit accounts/overdrafts customers will be revised downwards to 7.65 percent, from Sept. 9.
After this cut, home loans of the bank have become cheaper by 35 basis points since April. The bank is offering a repo linked home loans from July 1, 2019.
On July 5, the bank reduced its lending rate by 5 basis points after Reserve Bank of India governor Shaktikanta Das said he expects faster transmission of the successive repo rate cuts.
HDFC Bank, Bank of Maharashtra, Corporation Bank, Oriental Bank and IDBI Bank have also reduced their MCLR by 5-10 basis points over the last two months.
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