SBI cuts base rate by 30 basis points to 8.65 per cent

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SBI cuts base rate by 30 basis points to 8.65 per cent

The nation's largest lender reduced the base rate to 8.65 per cent for existing customers from 8.95 per cent, while the BPLR is down from 13.70 per cent to 13.40 per cent with effect from January 1.

The State Bank of India on Monday reduced the base rate and benchmark prime lending rates (BPLR) by 0.3 per cent each, which will benefit nearly 80 lakh of its existing customers. The nation's largest lender reduced the base rate to 8.65 per cent for existing customers from 8.95 per cent, while the BPLR is down from 13.70 per cent to 13.40 per cent with effect from January 1.

"We had done the rate review in the last week of December, and based on whatever deposits rates we had, our base rate was brought down by 30 basis points to 8.65 per cent now,'' managing director for retail and digital banking, PK Gupta told reporters in a concall.

The MCLR was reduced earlier also as the gap between MCLR and base rate had become quite wide. This move will help in reducing that gap, he said. The revision will ensure transmission of reduction in the policy rates in the recent past, he said. The bank will also extend its on-going waiver on home loan processing fees till March 31 for new customers and for customers switching their loans from other banks to SBI.

While all new customers are offered marginal cost-based lending rate (MCLR), more than half of SBI customers and old home loans are still linked to the base rate and some corporate loans to PLR. The bank, however, did not change the marginal cost of funds-based lending rate (MCLR) which would have brought down the cost for all borrowers. The one-year MCLR of the bank stands unchanged at 7.95 per cent. The new rates will be effective today, the bank said in a statement.

"The reduction in base rate is a New Year gift to the bank's loyal customers as a large number of consumers who have their loans linked to base rate will be benefited by a decrease in rates," Gupta said in a statement. Since SBI is a bellwether for the banking sector, the cut in interest rates is expected