SBI slashes MCLR by 35 bps; Savings Account interest rate cut to 2.75%

India's largest lender, State Bank of India (SBI) on Tuesday announced a reduction of 35 basis points (bps), or 0.35 per cent, in its marginal cost of funds-based lending rate (MCLR) across all tenors. This will make home and other retail loans cheaper i.e. the move will benefit the borrowers from SBI having MCLR-linked floating-rate loans.

One bps is one-hundredth of a percentage point.

This is the eleventh consecutive cut in MCLR in FY 2019-20. The bank said in a release that the one-year MCLR has now come down to 7.40 per cent per annum from the earlier 7.75 per cent per annum with effect from April 10, 2020, SBI said in a statement.

"EMIs on eligible home loan accounts (linked to MCLR) will get cheaper by around ₹24.00 per 1 lakh on a 30-year loan," SBI said.

In addition to it, the bank has also revised interest rates on saving accounts and reduced it by 25 bps to 2.75 per cent from 3 per cent, which will be effective from April 15, 2020.

In the same line, the bank has also revised the interest rates on saving bank deposits, keeping in view the liquidity in the system, which will be effective from April 15, 2020. The interest rates for balances up to Rs 1 lakh and above Rs 1 lakh will now accrue at 2.75 per cent as against the earlier 3 per cent.

SBI, earlier in March, reduced the fixed deposit (FD) rates after RBI cut interest rates by 75 basis points to 4.4%. SBI had earlier announced an interest rate cut on FDs on March 10, 2020.

The bank reduced domestic retail term deposit (TD) interest rates by 20 bps to 50 bps across tenors and bulk TD interest rates reduced by 50 bps to 100 bps across tenors.