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Thursday, 13 February 2020

42 Crore customers will get big benefit from SBI's latest decision, know what will be the effect

Mumbai:

 The decision taken by State Bank of India (State Bank-SBI), the country's largest public sector bank, could have a big impact on 42 crore customers. In fact, SBI has announced a reduction of 0.05 per cent in the Marginal Cost of Lending Rate (MCLR) over all maturity loans. Explain that SBI has announced to cut MCLR for the ninth consecutive time in the current financial year. Home loans, auto loans, personal loans of SBI customers have become cheaper after the MCLR has decreased. SBI said that the new rates will be effective from February 10.

 MCLR of loans with maturity of one year reduced to 7.85%
 The bank said in a statement that after this deduction, the MCLR of the loan with a maturity period of one year has come down to 7.85 percent. The bank made this cut in MCLR, a day after the results of the Reserve Bank's monetary policy review meeting were announced. The Reserve Bank kept the repo rate at 5.15 percent on Thursday after the meeting. However, the central bank announced a long-term repo for an amount up to Rs 1 lakh crore. This made it cheaper for commercial banks to raise debt.

 SBI said that in view of the excess liquidity in the banking system, it has also revised the interest rates for retail deposits of less than two crore rupees and bulk deposits of more than two crore rupees. For retail deposits, the interest rate has been cut from 0.1 to 0.5 percent and in wholesale deposits from 0.25 percent to 0.50 percent. The new rates are effective from 10 February.

 Home loan, auto loan and personal loan will be cheaper
 After reducing the interest rate of State Bank of India (SBI), home loan, auto loan and personal loan of customers will become cheaper. Significantly, existing loans become cheap due to decreasing MCLR. Customers have to pay a reduced EMI compared to the old EMI.

 What is MCLR - What is MCLR
 MCLR is also called Marginal Cost of Lending Rate. Under this, banks decide the loan rates according to the cost of their funds. This is the benchmark rate. Due to its increase, all types of loans taken from your bank become expensive. Also, the EMI of the loan becomes cheaper when the MCLR decreases.

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