SBI cuts MCLR by 5 basis points across tenors, other lenders too announce cuts

The country's largest lender State Bank of India (SBI) on Friday announced 5 basis points (bps) reduction in its MCLR across tenors, effective February 10.

This is the ninth consecutive cut in MCLR by the bank in current fiscal.

With this reduction, the one-year marginal cost of funds-based rate (MCLR) has come down to 7.85% per annum from 7.90%, a bank statement said.

The reduction in MCLR by the bank comes a day after the Reserve Bank of India (RBI) left repo rate unchanged at 5.15%, but announced long-term repo operation for up to Rs 1 lakh crore, making cost of funds cheaper for banks.

Bank of India also said it has reduced MCLR by 10 bps for maturities up to 6 months.

"Additionally, the bank has reduced interest rates on housing loan, which will now be available from 8% per annum. On the same lines, vehicle loan will now be priced from 8.50% per annum This reduction will be effective from 10 February 2020," Bank of India said.

Gurguram-headquartered Oriental Bank of Commerce said the bank has decreased its MCLR by up to 10 bps across various tenors to be effective from February 10.

While the one-year MCLR has been kept unchanged at 8.15%, one-month and overnight rates are down by 0.10% and 0.05% each, respectively, it said.

SBI said in view of surplus liquidity in the system, it has realigned its interest rate on retail term deposits (less than Rs 2 crore) and bulk term deposits (Rs 2 crore and above), effective February 10.

It slashed term deposits rates by 10-50 bps in the retail segment and 25-50 bps in the bulk segment.

"The impact of recent RBI policy measures and reduction in deposit rates will be reflected in the next review of MCLR," the bank said.

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