State Bank of India (SBI), the country’s largest lender, today announced a reduction in its external benchmark based rate (EBR) by 25 bps to 7.80% per annum, from 8.05% per annum. The revision will come into effect from January 1, 2020. With this reduction, interest rate for existing home loan customers as well as MSME borrowers who have availed loans linked to external benchmark based rate would come down by 25 bps.
The new home buyers will get loans at an interest rate starting from 7.90% per annum, as compared to 8.15% earlier, SBI said in a statement.
SBI’s external benchmark based lending rate, which is linked to RBI’s repo rate (currently at 5.15%), is fixed at repo rate plus 265 basis points. SBI charges a premium of 10 basis points to 75 basis points for pricing the effective interest on the home loan for the customer.
Earlier this month, SBI had today announced a cut in one-year MCLR rate or marginal cost of funds-based lending rate by 10 bps, effective from December 10th. After the latest cut, SBI’s one-year MCLR comes down to 7.90% per annum from 8.00% per annum. This is the eighth consecutive cut in MCLR by SBI this fiscal.
SBI is the largest commercial bank in India in terms of assets, deposits, branches, customers and employees. It claims to be the largest mortgage lender in the country. As on September 30, 2019, the bank has a deposit base of over Rs. 30 lakh crore with CASA ratio of little more than 45% and advances of nearly Rs. 22.5 lakh crore. SBI commands 25% market share each in home loans and auto loans, it said.
Source: livemint
