NEW DELHI: Day I of 2017 brought good news for millions of country people dreaming for their own home as country’s largest bank, State Bank of India (SBI), on Sunday slashed its loan rates sharply by 0.90 percentage points across all tenure loans in one of the steepest cuts since the global economic crisis in 2008.
A move came barely 24-hours after Prime Minister Narendra Modi asked banks to continue focus on the poor, the lower middle class, and the middle class and public interest in mind.
After the move, the so-called overnight marginal cost of lending rates (MCLR) fell to 7.75% from 8.65%. The rates for one-year loans are now 8% as against 8.90%, while for 2-year loans it is 8.10% and 3-year maturity it is 8.15%.
Helped by substantial surge in deposits, the interest rate cut is expected to boost sentiments which suffered due to demonetisation.
The new loans rates will be effective from January 1. Women home loan borrowers of SBI will be able to avail loan at interest rates of 8.20% while others can avail home loan at 8.25%.
Similarly, Union Bank of India has reduced its one year MCLR by 65 basis points or 0.65% to 8.65%.
On Friday, IDBI Bank and State bank of Travancore had also announced cut in lending rates. Borrowers of IDBI bank seeking three-year loans will be charged 9.30%, down 0.40%; while six-month loans have been pegged at 8.90%, down 0.35%.
IDBI bank will charge 9.15% on one-year loans against 9.30% now. Banks have been flush with an estimated Rs 14.9 lakh crore deposits following demonetisation.
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