The largest state-owned lender in the country, State Bank of India (SBI) has decided to cut interest rates by five basis points on its home loans up to Rs 30 lakh. The interest rate cut comes days within the Reserve Bank of India announced to cut repo rate by 25 basis points in its sixth bi-monthly monetary policy.
Rajnish Kumar, State Bank of India Chairman in a statement said that the bank has the highest share of the home loans market and it’s appropriate to empower the large lower and middle-class segment by transmitting the rate cut announced by the RBI.
Kumar at an event in Mumbai also said that the bank’s deposit rates are much lower than peers. He added a reduction in deposit rates will be required to cut the overall lending rates under the marginal cost of funds-based lending rate system.
Kumar also informed that the new rates will be effective from 15 February 2019, Friday. SBI is the latest bank to announce rate cut, as another state-controlled Bank of Maharashtra declared a 0.05 per cent cut in its MCLR for sixth-month loan tenor.