SBI cuts lending rate by 15 basis points across all tenors; introduces new term deposit scheme for senior citizens

State Bank of India (SBI), the state-run largest lender, has announced the reduction in its MCLR by 15 bps across all tenors.The one year MCLR comes down to 7.25 percent per annum from 7.40 percent per annum with effect from 10 May, 2020. This is the twelfth consecutive reduction in bank’s MCLR.Consequently, EMIs on eligible home loan accounts (linked to MCLR) will get cheaper by approximately Rs 255.00 for a 30 year loan of Rs. 25 lakh.The lender has also cut interest rates on retail term deposit by 20 bps for upto 3-year tenor, effective from 12 May.This is the twelfth consecutive reduction in bank’s MCLR, the lender said.Further, to safeguard the interests of senior citizens in the current falling rate regime, SBI has introduced a new product ‘SBI Wecare Deposit’ for Senior Citizens in the Retail Term Deposit segment.Under this new product, senior citizens will get an additional 30 bps premium on term deposits with 5 years and above tenor.This scheme would be in effect up to 30 September, 2020, the lender said.Pankaj Sharma, President & Head – Corporate Planning & Strategy, Religare Finvest Limited, said, the decision taken by SBI "will help NBFC sector but only those where SBI chooses to offer moratorium. For the rest of them, it would continue to be a liquidity issue. There are some apprehensions that it is difficult to check how much of the loans were being paid back by NBFCs and being promoter-driven companies, NBFCs may divert cash flow gains out of the moratorium to other businesses or service other borrowings like bond market. These apprehensions are misplaced. SBI would have done due-diligence on all such NBFCs at the time of sanction and would be keeping a regular monitoring of the account through current account/cash credit accounts regularly," Sharma said.