SBI cuts home, auto loan rates by 5bps

State Bank of India (SBI) on Thursday announced a reduction of interest rates on home and automobile loans by five basis points (bps).

As a result, SBI’s home loan rates will be 8.30% for loan upto Rs 30 lakh - the lowest in the industry and its car loan rates will be 8.7%. Home loan rates have been reduced for 5 bps across all brackets, SBI said in a statement. Car loan amount ranges from 8.70% to 9.20% compared to earlier range of 8.75% to 9.25% . “The exact rate depends on the amount of loan and the credit score of the individual,” the statement said.

The new rates came into effect from November 1, 2017.

Only new customers will be benefited from the rate reduction, as the lender has not reduced its marginal cost of fund based lending rate (MCLR), which is at



8%.

“With this reduction in rates, we are offering lowest rates for most of our product offering in the retail loans,” said P.K. Gupta, managing director, retail and digital banking, SBI.

“Lower rates along with wide distribution network and use of digital technology to enhance customer experience is a perfect package for any retail loan customer,” Mr. Gupta added.

The move comes days after the government announced a recapitalisation package for the public sector banks and made its intention clear to boost economic growth.

The rate cut by SBI, which is expected to be followed by others, is aimed at boosting retail credit growth. While overall credit growth has been 5% year-on-year, home loans are growing at a healthy rate of 13.2%, latest RBI data shows.