Monday, January 16, 2017

Breaking News
   At Least 32 Dead As Cargo Plane Crashes Into Homes In Kyrgyzstan   UP Elections 2017: Grand Alliance II? Akhilesh Yadav, Rahul Gandhi Wait For \'Cycle\' Verdict   Xiaomi Redmi Note 4 Teased as Flipkart Exclusive, Launch Set for January 19   Cyber Crime unit awaits nod to file chargesheet in 2014 case   No service tax on online rail tickets till Dec 31   Black money: India to gain access to Swiss bank info from Sept 2019   Cash curbs paralyse ops in co-op societies   Margao business, markets reel under liquidity crunch   Customers, bankers kept on toes in Mapusa   Long queues at banks on Day 1; cash crunch hits State   Anger And Scramble To Stash Cash In Black Money Squeeze: Foreign Media   After PM Modi Speech, Hawala (Money-Laundering) Spiked, Triggering Raids   Defence Minister Parrikar\'s Nuclear Remark Stressed As \'Personal Opinion   \'If You Succeed, The Country Succeeds\': Obama Tells Trump During Meet

Sections

Business

SBI cuts lending rate by 90 bps; others likely to follow suit

02nd January 2017, 12:00 Hrs

SBI cuts lending rate by 90 bps; others likely to follow suit

Pic Credit: LD SBI

Headline: SBI brings New Year cheer, cuts lending rates by 90 bps

Strap: Other banks expected to follow suit

PTI

New Delhi

A day after Prime Minister Narendra Modi asked banks to prioritise lending towards poor and lower middle class, country's largest lender SBI on Sunday cut benchmark interest rate across various maturities by 0.9 per cent, a move expected to be shortly followed by other banks.

The bank has reduced marginal cost of funds based lending rate (MCLR) by 0.9 per cent from 8.90 per cent to 8 per cent for 1-year tenure, State Bank of India (SBI) said in a statement.

On Saturday, the Prime Minister asked banks to pay special attention towards poor and middle class.

“While respecting the autonomy of banks, I appeal to them to move beyond their traditional priorities and keep the poor, lower middle class and middle class at the focus of their activities,” he had said.

“India is celebrating the centenary of Pandit Deendayal Upadhyay as Garib Kalyan Varsh. Banks should also not let this opportunity slip. They should take appropriate decisions in public interest promptly,” he had said.

Flushed with funds due to demonetisation, the new interest rate for other tenures including one month, three months and six months has been reduced by 0.9 per cent.

MCLR has been reduced by 0.9 percentage points to 8.10 per cent for two years and 8.15 per cent for three years.

Last week, its subsidiary State Bank of Travancore had announced reduction in the lending rate and another public lender IDBI too reduced it by up to 0.6 per cent.

Banks have moved to MCLR as their new benchmark lending rate from June, replacing the base rate system for new borrowers. It is calculated on the marginal cost of borrowing and return on net worth for banks. It was introduced by RBI to ensure fair interest rates to borrowers as well as banks.

It also seeks to address the regulator's primary objective of expediting monetary policy transmission along with augmenting uniformity and transparency in the calculation methodology of lending rates. MCLR rates are revised every month.

comments powered by Disqus