The country's largest public lender State Bank of India (SBI) has reduced its lending rates by 10 basis points or bps across all tenors on Monday. In a press release, SBI said it has cut marginal cost based lending rates (MCLR) by 10 bps across all tenors and added that the one-year MCLR will now come down to 7.90 per cent from 8 per cent.
The new lending rates will come into effect from December 10, the bank stated. The bank's release also suggested that this is the eighth consecutive reduction in MCLR in this financial year.
It is worth noting that the bank has not cut interest rates on its repo-linked loans and it has not reduced its fixed deposit rates as well.
The development comes after RBI's Monetary Policy Committee (MPC) decided to keep the key lending rate unchanged after five consecutive rate cuts since January 2019. As a result, the key repo rate continues to remain unchanged at 5.15 per cent.
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RBI Governor Shaktikanta Das said the review committee did not go for another rate cut as it wants more clarity on the fiscal situation and also wants better transmission of its previous rate cuts.
However, Das made it clear that the RBI will maintain an accommodative stance, allowing it room for rate cuts in future.