Even after the RBI maintained status quo in its December bi-monthly monetary policy meet with a rate pause, SBI today has slashed its lending rate by 10 basis points. One basis point is one-hundredth of a percentage point.
With effect from December 10, SBI's one-year MCLR stands reduced at 7.9% per annum as against 8% currently. Notably, this is the eight-straight reduction in MCLR by the bank in the FY 2019-20. The move will reduce the lending rate on SBI retail loans including home and personal loans.
Last week, the RBI held key repo rate steady at 5.15% after five back to back cuts this year. In its policy statement, RBI governor said, "Already, the weighted average term deposit rate has fallen by 16 bps. Overall liquidity in the system remains in sizable surplus. This augurs well for transmission to lending rates, going forward".
Also, he looks forward to the improved transmission of rates to the end borrower with the linking of lending rates to the key repo rate of the RBI.