SBI reduces interest rate by 5 basis points for home loans upto Rs 30 lakhs

Rajnish Kumar, Chairman, SBI, said it was difficult to pass on the RBI rate cuts as it would be difficult for SBI to cut deposit rates.

Published: 08th February 2019 11:46 PM  |   Last Updated: 09th February 2019 09:21 AM   |  A+A-

SBI

For representational purposes (File | EPS)

By Express News Service

MUMBAI:  On the back of the monetary policy announced by the RBI on February 7, SBI has cut interest rates on its home loans for all loans up to Rs 30 lakh. The bank cut its home loan rate by 5 basis points or 0.05 per cent.

Rajnish Kumar, Chairman, SBI, said it was difficult to pass on the RBI rate cuts as it would be difficult for SBI to cut deposit rates. He said lending was low and any further cuts without a deposit rate cut would be tough.

ALSO READ: RBI may increase rates by 25 bps in Q4 2019 and Q1 2020

On the issue of benchmarking retail loans to an external benchmark, as suggested by RBI in its December meet, Kumar said it was not possible to follow it for EMI-based loans.

“It can be done for high-value or corporate loans,” he said.Banks are awaiting the notification for the same. The RBI had set April 1, 2019 as the deadline for retail loans to move to an external benchmark.

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