The country’s largest lender State Bank of India (SBI) on Thursday reduced its Marginal Cost of Funds based Lending Rate (MCLR) by 15 basis-points (bps) across all the tenors. With this reduction the one year MCLR will be around 7.25% with effect from May 10. State Bank of India said in a statement -“Consequently, equated monthly installments on eligible home loan accounts (linked to MCLR) will get cheaper by approx. ₹255.00 for a 30 year loan of ₹25 lakh”. It also reduced the interest rates on retail term deposits (i.e. below ₹2 crore) by 20 bps for a tenor of up to 3 years.
Further, India’s largest bank i.e. lender also has introduced a new product for senior citizens, whereby their retail terms deposits (TDs) with a tenor of five years or more will fetch them 80 basis points higher interest. State Bank of India This scheme would be in effect upto September 30, 2020.
Following the 15 bps MCLR cut, which will effective from May 10, the one year MCLR will come down to across 7.25 per cent from 7.40 per cent. One basis point is equal to one-hundredth of a percentage(%) point.
In view of adequate liquidity with the bank, State Bank of India told that it has reduced its interest rates on retail TDs by 20 bps for a tenor of up to 3 years, effective from May 12. The bank will be offering 5.50 percent interest on TDs in the one year to less than three years maturity bucket, against 5.70 percent.
In a safeguard the interests of senior citizens in the current falling rate regime, SBI has introduced a new product called ” State Bank of India Wecare Deposit” in the retail TDs segment. This product will earn senior citizens 80 bps higher interest rate than the rate applicable for the general public that is 30 bps extra premium. This additional premium will not payable in case of premature withdrawal of the such deposits. For retail TD of a tenor below five years, senior citizens will be continue to earn 50 bps higher than the rate applicable for the general public.