State Bank of India (SBI) on Friday announced a cut of 75 basis points in its lending rates, hours after the Reserve Bank of India (RBI) announced a reduction of the same magnitude in the repo rate. Repo rate is the key interest rate at which the regulator lends short-term funds to commercial banks such as SBI. In a statement late on Friday, the country’s largest bank by assets said that with the latest cut, it passed on the entire benefit of the 75-basis point cut by the RBI. SBI said the news lending rates will take effect from April 1, 2020.
- SBI said it passed on the entire benefit of the RBI rate cut to its borrowers availing loans linked to external benchmark- and repo-linked lending rates.
- From April 1, SBI said its external benchmark-linked lending rate will be reduced to 7.05 percent from 7.80 percent, and repo rate-linked lending rate to 6.65 percent from 7.40 percent.
- State Bank of India also announced a cut of 20-100 basis points in fixed deposit (FD) interest rates. These rates will take effect from March 28, SBI said.
- SBI’s retail fixed deposit interest rates were lowered by 20-50 basis points across tenors, and bulk term deposit rates by 50-100 basis points.
- The government outlined a Rs 1.7 lakh-crore fiscal stimulus plan the previous day to support the poor through direct cash transfers and food security measures. It has asked people to stay indoors for three weeks in the world’s biggest lockdown.
- This week, the government made cash withdrawals using debit card free across ATMs for the next three months, and removed any penalty charges for failing to meet any minimum balance requirements set by banks.
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