India’s Largest PSU Bank State Bank of India, surprised its customers, with a bonanza, through a reduction in the base rate and benchmark prime lending rates (BPLR) wef 1st Jan 2018. The details are as under:
- The rates for the existing customers by 30 basis points each (one basis point is a hundredth of a percentrage point).
- Also, the bank would be waiving the processing fee on its home loan till 31st March 2018 for new customers and also for customers who are switching their loans from other banks to SBI.
- Many of the customers availing Home Loans, as well as Corporate Loans are still in the base rate system though MCLR (Marginal Cost based lending Rate), is offered to new customers.
- From the current move around 8 million customers are expected to be benefitted.
- The revised Base Rate (the minimum rate that the bank can offer to its customers) for the bank is now 8.65 per cent and the BPLR will be 13.40 per cent.
- The decision is taken by the bank with a view to pass on the benefit of reduction in policy rates to its customers.
For example, a person who has availed a Home Loan in the beginning of 2016, just before MCLR which came in to effect from April 2016, was paying a home loan rate which is 10-15 basis points above the base rate. Their home loan rate will now come down to 8.75 – 8.80 per cent.