SBI loans to get cheaper as lending rate down by 5-10 basis points; will home loans get cheaper too?

New Delhi : India's largest public lender State Bank of India (SBI) has cut down its key lending rate for short-term loans.

The public lender said it is reducing Marginal Cost-based Lending Rate (MCLR) by 5-10 basis points to 6.65 per cent for short-term loans from July 10.

This happens to be the 14th consecutive reduction in MCLR and that the new lending rate will be applicable on loans with a term of up to three months. The latest cut will not be applicable on loans with long term duration.

The move has been aimed at boosting credit and revive business. The banks claimed that they have the lowest rate of interest on loans across the market.

The bank also said that the reduction in three-month MCLR is in line with its External Benchmark-based Lending Rate.

It may be noted that the Reserve Bank of India (RBI) had in May slashed key repo rate to four per cent. This has allowed many banks to lower their MCLRs in line with its external benchmark.

Last month, SBI had reduced its MCLR by 25 basis points across all tenors.