SBI reduces lending rate by 0.15%, introduces special FD plans for senior citizens

The State Bank of India (SBI), which is India’s biggest lender, has announced a 15 basis points (bps), or 0.15 per cent reduction in the lending rates across all tenures. Following this reduction, which will come into force from May 10, 2020, the one-year Marginal Cost of Funds based Lending Rate (MCLR) will come down to 7.25 per cent, from the present 7.40 per cent.

According to the SBI, the EMIs on eligible home loan accounts (linked to MCLR) will become cheaper by nearly ₹255 for a 30-year loan of ₹25 lakh. This reduction in MCLR, is the 12th consecutive one of its kind, offered by the bank.

This means that the immediate impact will be only for those borrowers who have their home loan linked to the bank’s MCLR for which the re-set date is nearing. With this development, the home loan EMIs, for those availing it under this scheme, will either come down or their loan tenures will get decreased.

The bank has also introduced some special fixed deposit (FD) schemes for senior citizens, known as ‘SBI We Care Deposit’. As per the new scheme, an additional 30 bps, or a 0.30 per cent premium will be payable for the senior citizens’ retail term deposits with tenures of five years and above.

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Besides the lending rate, SBI has also announced a 20 bps, or 0.20 per cent cut in the interest rates for the retail term deposits with tenures of up to three years. This will come into effect from May 12.

SBI is the biggest commercial bank in terms of deposits, assets, branches, employees as well as customers. In addition, it is also the largest mortgage lender in the country.