SBI slashes lending rates
The State Bank of India (SBI), slashed its loan rates sharply by 0.90% points across all tenure loans. After the move, the so-called overnight marginal cost of lending rates (MCLR) fell to 7.75% from 8.65%.
The new rates came into effect from January 1st. Now, the rate one-year loans now stands at 8% (against the previous 8.90%), 8.10% for two-year loans and 8.15% for three-year loans. Adding to it, SBI's women customers can avail home loans at 8.20% interest and others at 8.25%.
After Prime Minister Narendra Modi announced demonetization, Rs. 14.9 lakh crores was injected into the banks through deposits. This raised expectations that banks would cut lending rates to boost credit growth, and spark a revival in private investments.
Lower lending rates will be welcomed by the RBI, which cut the policy rate by 175 bps or 1.75% since the start of 2015, but felt that banks were being too slow in passing the benefits to customers.
