State Bank of India (SBI), the country's largest lender by assets, on Tuesday reduced its interest rate by 10 basis points on housing loans of up to Rs. 30 lakh, according to a press release issued by the bank. After the reduction, the applicable interest rate for housing loans below Rs. 30 lakh will range from 8.60 per cent per annum to 8.90 per cent per annum, from existing rates of 8.70 per cent per annum to 9.00 per cent per annum, the release said. The move comes after Reserve Bank of India (RBI) slashed its key interest rate by 0.25 per cent for second time in a row under Governor Shaktikanta Das.
SBI has also reduced its benchmark lending rates by five basis points across all tenors. The marginal cost of fund-based lending rate, or the MCLR, will now stand at 8.50 per cent for the one-year tenor, down from 8.55 per cent, with effect from April 10, 2019, SBI said in a statement.
With effect from May 1, 2019, SBI's saving bank interest rates will also be revised. For balances up to Rs. 1 lakh, SBI will offer an interest rate of 3.50 per cent per annum while for balances above Rs. 1 lakh, the effective interest rate will be 3.25 per cent per annum, the lender said.
Besides SBI, Indian Overseas Bank also reduced its interest rate on loans (MCLR) by 5 basis points for tenors of one-year and above from April 10. Last week, Bank of Maharashtra slashed its MCLR with effect from April 7, 2019. Muted growth and subdued inflation prompted the RBI, last week, to lower its key lending rate for commercial banks by 25 basis points to 6 per cent.