The State Bank of India (SBI) has revised its marginal cost of funds-based lending rates (MCLR), reducing the one-month tenure interest rate by 25 basis points (bps), effective from October 15, 2024. This rate cut brings the one-month MCLR down from 8.45% to 8.20%. Other tenures, however, remain unchanged.
For home loans, the interest rates remain between 8.50% and 9.65%, depending on the borrower’s credit score. Additionally, the base rate for SBI stands at 10.40%, and the Benchmark Prime Lending Rate (BPLR) is 15.15%.
SBI’s move comes amidst expectations of easing inflationary pressures and aims to enhance liquidity for short-term borrowers. However, some analysts argue that this may not result in significant relief for long-term borrowers, as the majority of MCLR rates remain unchanged.
Senior SBI official C.S. Shetty explained the rationale behind the decision, saying, “This adjustment primarily targets short-term liquidity needs, ensuring borrowers have access to more affordable credit in the current economic environment.”
Market experts believe that while this cut offers temporary relief, the overall lending market remains competitive, with other banks likely to follow suit in adjusting their rates to maintain customer retention.
The reduction is part of SBI’s broader strategy to align its loan offerings with evolving market conditions while maintaining a cautious approach towards long-term deposit and lending rates.
