In a bid to offer New Year joy to its customers whose loans are still linked to these benchmarks, public sector lender State Bank of India (SBI) has announced a 30-basis-point cut in its old lending rate benchmarks — Base Rate and Benchmark Prime Lending Rate.
The revised base rate of 8.65 per cent will come into effect from January 1, 2018.Post the update, the Benchmark Prime Lending Rate is 13.40 per cent (13.70 per cent).
As far as the regulatory requirements are concerned all rupee loans sanctioned by banks with effect from April 1, 2016, are marked with reference to the marginal cost of funds based lending rates (MCLRs). Existing borrowers will be able to switch over to interest rates linked to MCLR (other than fixed rate loans).
While SBI scaled down the old lending rate benchmarks, the MCLR across all tenors remained unchanged. The benchmark of one-year MCLR is 7.95 per cent. Additionally, SBI has decided to broaden its ongoing discount on home-loan processing fees till March 31, 2018 exclusively for new customers interested on buying a house and other customers planning to switch their ongoing loans to SBI.