SBI slashes MCLR by 25 bps across all tenors and EBR by 40 bps

India's largest lender State Bank of India (SBI) on Monday lowered its marginal cost of fund-based lending rate (MCLR) by 25 basis points (bps) across all tenors. With this, one-year MCLR has come down to 7 per cent from 7.25 per cent. The cut will be effective from Wednesday, June 10, 2020. This is the thirteenth consecutive reduction in the bank's MCLR.

In addition to this, the bank also reduced its external benchmark linked lending rate (EBR) as well as repo linked lending rate (RLLR) by 40 bps. With this, the EBR has been reduced to 6.65 per cent per annum from 7.05 per cent and RLLR has come down to 6.25 per cent from 6.65 per cent. These rates will become effective from July 1, 2020.

The Bank also cuts its Base Rate by 75 bps. With this, the base rate comes down to 7.40 per cent from 8.15 per cent and will become effective from June 10, 2020.

"Consequently, EMIs on eligible home loan accounts linked to MCLR will get cheaper by nearly Rs 421 and those linked to EBR/RLLR will get cheaper by around Rs 660, for a 30 years loan of Rs 25 lakh," the bank said in the release. However, the reduction will not affect retail loans disbursed after October 1, 2020, when the banks moved to an external benchmark on the direction of the Reserve Bank of India (RBI).

The cut in EBR and RLLR by the bank comes after the RBI on May 22, 2020, had cut repo rate by 40 basis points to 4 per cent. Some of the banks like Punjab National Bank (PNB), Bank of India (BOI) and UCO Bank have already slashed their lending rates linked to the repo rate and MCLR rates.