MUMBAI: State Bank of India (SBI) has cut home loan rates up to Rs 30 lakh by 5 basis points citing lower interest rates after the RBI cut on Thursday.
One basis point is 0.01 percentage point.
SBI's home loan rates up to Rs 30 lakh now stands at 8.70% after the cut.SBI on Friday said home loan rates for loans upto Rs 30 lakh stand reduced.
SBI chairman Rajnish Kumar said that being the bank with the largest home-loan market share, SBI thought it appropriate to empower large lower and middle class segment by transmitting the rate cut by RBI.Kumar's comment came a day after Reserve Bank of India surprised the market by lowering repo rate by 25 basis points.But the full transmission of the repo rate cut may not happen until banks lower their deposit rates under the marginal cost-based lending rates system, Kumar said.Deposit rates offered by the country's largest bank is already on the lower side and therefore reducing the rates further would be a challenge."Rate differential is already big between our bank and the others," Kumar said.On the proposal of linking loans to external benchmark, Kumar said that that may miss the April deadline as operative guidelines are yet not clear.