The bank also reduced interest rate on term deposits - retail and bulk - by 10-50 basis points (bps) across various tenors.
India's
largest lender State
Bank of India (SBI) has decided to reduce its Marginal Cost of
Funds based Lending Rate (MCLR) by five bps across all tenors. The
one year MCLR comes down to 7.85 per cent per annum (p.a) from 7.90
per cent per annum with effect from 10th February 2020. This is the
ninth consecutive cut in MCLR in FY 2019-20, SBI said in statement.
This will lead to a reduction in home and auto loan rates.
The
lender also decided to slash interest rate on term deposits –
retail and bulk – by 10-50 basis points (bps) across various tenors
as it is sitting on a pool of surplus funds. The revised rates will
come into effect from February 10, 2020.
The
bank's credit grew by 6.8 per cent to Rs 23, 01, 669 crore in 12
months ended December 2019, driven by Retail-Personal Advances which
clocked a growth of 17.49 per cent.
SBI
chairman Rajnish Kumar in January 2020 had said, at the start of year
bank had given guidance of 10-12 per cent growth in advances in FY20.
But will be difficult to reach 10 per cent mark, reflecting weak
demand for corporate credit.
Referring
to resource position, SBI in a statement said, in view of surplus
liquidity in the system, bank will realign its interest rate on
Retail Term Deposits (less than Rs two crore) and Bulk
Term Deposits (Rs two and above) February 10, 2020.
Its
deposits rose by 9.9 per cent to Rs 31,11,229 crore in 12 months
ended December 2019. The share of low cost deposits – current
account and savings account – in total deposits declined by 51
basis points to 44.72 per cent in December 2019 from 45.23 per cent a
year ago.
According
to Reserve Bank of India, overall liquidity in the system remained in
surplus in December 2019 and January 2020.
Average
daily net absorption under the liquidity adjustment facility (LAF)
amounted to Rs 2.61 trillion in December 2019.
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