A day after Reserve Bank of India decreased the policy rates, State Bank of India, the nation’s biggest moneylender, said it might lessen home credit rates however there may not a decrease in the benchmark loan rates.
“On the back of the monetary policy announced by the RBI, we have taken the lead to cut interest rates on home loans up to Rs 30 lakh,” the bank’s chairman, Rajnish Kumar, said in a statement.
“It is difficult for us to cut deposit rates,” Rajnish Kumar said on the sidelines of an event.
SBI Cuts Interest Rate On Home Loans Up To Rs 30 Lakh
SBI’s deposit rates are lower than most other banks.
He said since deposit rate cut was not possible, a decrease in the benchmark lending rate or the MCLR (Marginal Cost of Funds based Lending Rate) was not likely. However, there could be some decrease in the home loan rates however the quantum would be small.
“There will be an announcement shortly.”
Such a reduction was possible by lowering the spread between the MCLR and the actual lending rate.
SBI home loans are connected to one year MCLR. On Thursday, Reserve Bank of India reduced repo rate by 25 bps to 6.25% to address development concerns. This was the top-notch cut by the national bank in one and a half years. RBI governor Shaktikanta Das said he would anticipate monetary transmission from banks. Mr. Das is expected to chiefs of banks in the following two weeks to discuss, among others, monetary transmission.