India’s largest lender cuts its base rate by 30 basis points to 8.65%. Existing customers of State Bank of India (SBI) will benefit from this reduction of rates. Earlier at 8.95%, the bank also has cut the BPLR (Benchmark Prime Lending Rate) from 13.70% to 13.40%. The bank however has not altered its Marginal Cost of funds based lending rate (MCLR), which is the primary determinant of interest rates on loans. The 1-year MCLR of SBI remains the same at 7.95%.
PK Gupta, the managing director of SBI said that the base rat e was dropped by 30 basis points based on the rate review that took place during the last week of December 2017. This change in rate has benefitted more than 80 lakh customers that were previously on the old lending scheme. This was done also done in order to bridge the gap between The MCLR and base rate as the gap had widened quite a lot over the years, PK Gupta said.
Furthermore, the bank also plans to waive off the processing fee on home loans until the end of March 2018 for new home loan customers and customers planning to refinance thwir home loan with SBI.