Cheer to customers: SBI cuts base rate by 15 bps, with effect from April 1

By: | Updated: April 3, 2017 4:35 PM

Bringing cheer to customers who have raised loans prior to April 1, 2016, the largest public lender State Bank of India (SBI) cut its base rate by 15 basis points (bps) to 9.10 per cent with effect from April 1, 2017. Earlier, the base rate stood at 9.25 per cent.

The marginal cost-based lending rate (MCLR) of SBI, however, remains unchanged. The six-month MCLR rate is at 7.95 per cent while the three-year rate stands at 8.15 per cent.

Bringing cheer to customers who have raised loans prior to April 1, 2016, the largest public lender State Bank of India (SBI) cut its base rate by 15 basis points (bps) to 9.10 per cent with effect from April 1, 2017. Earlier, the base rate stood at 9.25 per cent.

The marginal cost-based lending rate (MCLR) of SBI, however, remains unchanged. The six-month MCLR rate is at 7.95 per cent while the three-year rate stands at 8.15 per cent.

Recently, public sector bank Canara Bank announced a 0.10 percentage point reduction in its MCLR-based lending rate to 9.40 per cent from April 1, making loans cheaper for consumers. “The bank has revised its base rate (based on MCLR) from 9.50 per cent to 9.40 per cent, a reduction of 10 basis points (0.10 per cent) with effect from April 1, 2017,” an exchange filing by the bank said.

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Canara Bank said all rupee loans and advances linked to the base rate will accordingly carry reduced rate of interest by 10 basis points.

At the start of new year, SBI had slashed its MCLR (marginal cost of lending rate) by 90 basis points across all-tenure loans, bringing down the effective home loan rate to 8.60% from 9.10% per annum earlier, Union Bank of India had reduced its MCLR by 65-90 basis points for loans of various tenures, while PNB had cut its MCLR by 70 basis points for 1, 2 and 3-year tenures. That resulted in a bonanza, especially for borrowers either having or willing to have long-term home loans of, say, 15 to 20 years and more.

It may be noted that banks revise their lending rates, which is based on base rate, every month. Marginal cost based lending rate (MCLR) was introduced into the banking system in June 2016, that replaced the base rate system for new borrowers.

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