SBI cuts interest rate by 5 bps on home loans up to Rs 30 lakh

"As the nation's largest lender, we have always kept customer interests at the centre," said SBI chairman Rajnish Kumar

Press Trust of India | New Delhi
Last Updated at February 8, 2019 21:27 IST

Within a day of RBI reducing repo rate by 25 basis points, the country's largest lender State Bank of India Friday announced a cut in interest rates by 5 basis points on its home loans up to Rs 30 lakh.

In it sixth bi-monthly monetary policy review announced Thursday, RBI had cut the repo rate by 25 basis points to 6.25 percent.

"On the back of the monetary policy announced by the RBI, we have taken the lead to cut interest rates on home loans up to Rs 30 lakh," the bank's chairman, Rajnish Kumar, said in a statement.

The new rates are effective from Friday.

He said the bank has the highest market share of the home loans market and it is appropriate to empower the large lower and middle class segment by transmitting the rate cut announced by the RBI.

Talking to reporters at an event earlier today, Kumar said the banks deposit rates are much lower than peers and pointed out that a reduction in deposit rates will be required to cut the overall lending rates under the MCLR system.

For effecting a rate cut in home loans, the bank will either have to decrease its one year MCLR or can go for a cut in its spreads over MCLR for the product, he said.

Within hours of the RBI move, state-run Bank of Maharashtra had announced a 0.05 percent cut in its MCLR for sixth-month loan tenor.

In a post policy conference with reporters, RBI Governor Shaktikanta Das had said he will speak to bankers to ensure a quicker and better transmission of the policy rates in a meeting scheduled to take place in two-three weeks.

When asked about the external benchmark rate which the RBI wants to implement by April, Kumar said it is unlikely to be implemented as the operative guidelines on the same are yet to be released.

TO READ THE FULL STORY, SUBSCRIBE NOW NOW AT JUST RS 249 A MONTH.

MONTHLY

₹ 249

Select

ANNUAL

₹ 1799

Select

Best Offer

SMART ANNUAL

₹ 1499

₹ 1799

Opt for auto renewal and save Rs 300

Select

What you get on Business Standard Premium?

Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
Pick your 5 favourite companies, get a daily email with all news updates on them.
26 years of website archives.
Preferential invites to Business Standard events.