Ahead of RBI’s monetary policy this week, country’s largest bank State Bank of India (SBI) has reduced its benchmark lending rate by 0.15 percentage point to 9.10%, a move that will lower EMIs for borrowers.
However, the bank made no changes in the marginal cost-based lending rate (MCLR). The benchmark one-year lending MCLR stands at 8%.
Base rate or the minimum lending rate of the bank has been reduced from 9.25% to 9.10% effective April 1, SBI said in a release.
The bank had last reduced its base rate by 0.05 percentage point to 9.25% in January this year when it reduced MCLR as well.
Banks have switched to MCLR as their new benchmark lending rate from June last year, replacing the base rate system for new borrowers.
It is calculated on the marginal cost of borrowing and return on net worth for banks. It was introduced by RBI to ensure fair interest rates to borrowers as well as banks.
Majority of loans are still on base rate as MCLR was only introduced recently.
Similarly, Benchmark Prime Lending Rate (BPLR) has also been reduced by similar percentage points to 13.85% from 14%, SBI website said.
With the reduction, EMIs for the new as well as existing borrowers who have taken housing and car loans at the base rate will come down by at least 0.15 percentage point.
The new rate is effective from the date the bank merged five of its associates and Bharatiya Mahila Bank putting it on the list of top 50 large banks of the world.
The total customer base of the bank has reached 37 crore with a branch network of around 24,000 and nearly 59,000 ATMs across the country.
The merged entity has a deposit base of more than ₹26 lakh crore and advances of ₹18.50 lakh crore.
It is to be noted that SBI has made changes in signage and logo, with its iconic keyhole set against the background of inky blue.
There have been minor changes in the design and colour of SBI’s new look from April 1.
The background to the SBI signboard has been changed from white to inky blue while the SBI logo or the monogram is a few shades lighter than the existing blue.