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SBI cuts MCLR by 10 basis points, slashes term deposit rates.

The country’s largest lender, State Bank of India (SBI), has cut its key lending rate by 10 basis points across all tenures from Tuesday and has also reduced interest rates on term deposits.


SBI cuts MCLR by 10 basis points, slashes term deposit rates by 20-25 bps - Bank official hints at another round of rate cuts following low credit offtake

The one-year Marginal Cost of Funds based Lending Rate (MCLR) will come down to 8.15 percent from 8.25 percent, effective September 10. This is the fifth straight cut in MCLR in the current financial year (FY 2019-20), SBI said in a statement.

A senior SBI executive said that while the bank is passing on the benefit of cost, the demand for credit is also low. There could be another round of reduction in lending rates.

The Reserve Bank of India's data on year-to-date credit offtake indicates that the outstanding loans of the Indian banking system as of mid-August have shrunk by about 0.9 percent from the March-end position. Year-on-year credit growth was about 11.6 percent.

"We are expecting a pick up in credit demand during the busy season which starts in October," the executive said.

In view of the falling interest rate scenario and surplus liquidity, SBI is also realigning its interest rates on term deposits (TD), the bank said.

The lender has reduced retail TD rates by 20-25 bps and bulk TD rates by 10-20 bps across tenures.

SBI is sitting on surplus funds in excess of Rs 50,000 crore, which is creating a challenge to deploy resources gainfully, the official said.

Deposits in the banking system have grown 0.7 percent from the start of the financial year until mid-August and 10.2 percent year-on-year, according to RBI data.

SBI | MCLR | Stock News | Market Update 
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  1. AdyJuly 16, 2020 at 6:01 PM

    Thanks for your valuable information. stock investor is a stock related website which provides day to day information of the stock market.
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