The country’s largest bank, State Bank of India (SBI) Reserve Bank of India In line with the recent repo rate cut (Monetary Policy Impact), it has reduced its external benchmark linked interest rates (EBLR) by 25 basis points. After this reduction, EBLR will be 7.90 percent, which will be effective from December 15. This step is considered to be a relief to lakhs of retail and MSME customers of the bank.
Along with this, the bank has also reduced its all-term Marginal Cost of Funds-Based Lending Rate (MCLR) by 5 basis points. MCLR for one year maturity will now be 8.70 percent. This change will reduce the cost of loan for existing and new customers of the bank (loan rate cut).
Apart from this, the bank has reduced the base rate from 10 percent to 9.90 percent. This reduction in the base rate will provide relief to customers whose old loans are still linked to this rate (interest revision).
Also, SBI has increased the fixed deposit rate with maturity of two to three years to 6.40 percent, so that depositors can get better returns. On the other hand, Indian Overseas Bank has also reduced its EBLR by 25 basis points to 8.10 per cent,
Due to which more cheap loans are expected to be available in the competitive banking environment (banking sector update). The purpose of this massive reduction is to make loans cheaper to customers and promote investment-consumption. Experts believe that other banks may also reduce interest rates in a similar manner in the coming months.
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