The State Bank of India on Monday cut the marginal cost of lending rate and interest rates. The marginal cost of lending rate is the minimum interest rate below which the bank cannot lend to customers.

For overnight lending, the bank has reduced the MCLR from 7.90% to 7.80%. The MCLR for six months has been reduced from 8.10% to 8%. The yearly MCLR is now 8.15%, down from 8.25% earlier, the bank said. The new rates will be applicable from September 10.

The SBI has also reduced the retail term deposit rates. The new rate for term deposits for a period of one year to two years will be 6.50% instead of 6.70%. For senior citizens (those above 60 years of age), the new rate applicable will be 7% instead of 7.20%.

For term deposits of a period between two and three years, the bank will pay interest at 6.25% instead of 6.50%. For senior citizens, the new interest rate will be 6.75% instead of 7%.

The SBI has also slashed bulk term deposit rates by 10 to 20 basis points (0.10% to 0.20%), for all categories of deposits between seven days and 10 years. The bank said that the term deposit rates were reduced due to “falling interest rate scenario and surplus liquidity”, the Hindustan Times reported.

The SBI is the country’s largest lender. It has around 26% of the market share of auto loans and 35% of home loans.

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