SBI reduces MCLR; loan interest rates to get cheaper
Amid the lockdown, SBI has announced a reduction in interest rates for its customers. After this decision, EMI on MCLR based loan will be reduced. SBI, the country’s largest public sector bank, has cut interest rates by 0.15 per cent. After this deduction, interest rates have come down from 7.40 per cent to 7.25 per cent. The new rates will be applicable from May 10. The RBI lowered the repo rate by 0.75 per cent in March to boost the economy amid coronavirus. Earlier, SBI had cut interest rates by 0.35 per cent in April. This is the 12th consecutive cut in MCLR by the bank and the second in FY 2020-21.
Earlier, the public sector Indian Overseas Bank (IOB) and Bank of Maharashtra (BoM) announced a reduction in the marginal cost based interest rate (MCLR) of their funds. “The bank has revised the MCLR from 10 May 2020 till further review,” the IOB said in a regulatory notice sent to the stock market. The Chennai-headquartered bank said that the interest rate on the marginal cost-based loan of the fund for a period of one year has been reduced by 0.10 per cent to 8.15 per cent. The reduced rate will be applicable from 10 May.
The MCLR rate for a period of M years is the prime base rate for loans such as personal, car and home loans. The Pune-based Bank of Maharashtra reduced the MCLR-based interest rate for a period of one year by 0.10 per cent to 7.90 per cent. In a communication sent to the stock markets, the bank has decided to reduce its MCLR rate from May 7, following which the bank has reviewed its interest rates as per RBI guidelines. Bank of Maharashtra has said that the MCLR rate on loans ranging from one day to six months will range from 7.40 to 7.70 percent.
On the other hand, Canara Bank, another public sector bank, has kept its MCLR rate unchanged. The bank’s one-year MCLR rate has been kept unchanged at 7.85 percent. In a notice sent to the Bombay Stock Exchange by the IOB, the bank said that the interest rate will be reduced from the current 8.10 percent to 8.05 percent for a period of three months and 8.10 percent from the current 8.15 percent for a period of six months. The bank has said that the interest rate on the loan for one year period will be reduced from 8.25 per cent to 8.15 per cent and for a period of two years it will be reduced from 8.30 per cent to 8.20 per cent.
