Banks Cut MCLR: Home Loans to Get Cheaper

Country’s largest lender State Bank of India (SBI) has announced the reduction in its MCLR by 25 bps across all tenors. The one-year MCLR comes down to 7 per cent per annum from 7.25 per cent per annum with effect from June 10, 2020. This is the thirteenth consecutive reduction in bank’s MCLR. Consequently, EMIs on eligible home loan accounts linked to MCLR will get cheaper by approximately ?421 and those linked to EBR/RLLR will get cheaper by around ?660, for a 30-year loan of ?25 lakh,” SBI said. Public sector lender Indian Overseas Bank has cut marginal cost of funds based lending rate (MCLR) by up to 0.30 per cent across all tenors, which will bring down cost for consumer loans. The benchmark one-year MCLR, against which most of the consumer and retail loans are priced, has been cut by 0.20 per cent from June 10, Indian Overseas Bank (IOB) said. Hence, loans linked to MCLR will become cheaper, said the Chennai-based state owned bank. The lending rate reduction comes after Reserve Bank of India (RBI) cut the repo rate by 40 bps in May. SBI has reduced its deposit rate twice in May which also helped to reduce the lending rate.