Starting last week of October, top banks have been revising their lending and deposit rates. State Bank of India (SBI), the country’s largest lender, reduced its marginal cost of funds based lending rate (MCLR) by 15 basis points (bps). MCLR is the new benchmark lending rate at which banks will lend to new borrowers. One basis point is one-hundredth of a percentage point.
SBI links new home loan interest rates to 1-year MCLR, which now stands at 8.90%, compared to 9.05% earlier. SBI has a spread on home loans at 20 bps for women and 25 bps for other individuals. Hence, the interest rate on SBI’s home loans for these two groups would be 9.10% and 9.15%, respectively. Rates of all the other loans linked to MCLR—such as auto loans and personal loans—would also reduce by 15 bps.
ICICI Bank Ltd, the country’s largest private sector bank based on assets as on 31 March, has also reduced its MCLR. Its 1-year MCLR was cut by 10 bps to 8.95%.