India's largest bank the State Bank of India (SBI) has cut its marginal cost of funds-based lending rate (MCLR) by 10 basis points (bps) across tenors. The new rates are effective immediately. The one-year MCLR or the minimum lending rate now stands at 8.40% from 8.45%.
The one-year MCLR is the benchmark against which most customer loans such as auto, personal and home loans are priced. One basis point is one-hundredth of a percentage point.
This came weeks after the bank cut its deposit rates on some select maturities with effect from 17 June 2019.
Last month, the IDBI Bank had reduced its MCLR by 5-10 basis points across various tenors, with immediate effect.
Top private sector lenders like Axis Bank, Yes Bank and HDFC Bank had initiated deposit cuts between 0.10 and 0.25 percent in the middle of June across select buckets.
At the 6 June review, the RBI had cut the key policy rate by 0.25% and had asked banks to quickly pass on the benefits of rate cuts. The RBI also hinted at further easing by shifting its stance to accommodatory from neutral, taking the total quantum of rate cut to 0.75 % in 2019.