Eight million customers to gain from move designed to reward loyalty
In a surprising move at the start of the year, State Bank of India (SBI) reduced its base rate and benchmark prime lending rates (BPLR) for existing customers by 30 basis points each effective from January 1.
One basis point is a hundredth of a percentage point.
The bank said it would also extend its ongoing waiver on home loan processing fee till March 31 for new customers and for customers switching their loans from other banks to SBI.
Though all new customers are offered the marginal cost-based lending rate (MCLR), a large chunk of retail customers — especially on the home loan side — as well as old corporate loans, are still in the base rate system.
About 8 million customers would benefit from this move, said P K Gupta, managing director (retail and digital banking), SBI.
The revised base rate for the bank is now 8.65 per cent, while the BPLR is 13.40 per cent. The base rate is the minimum a bank can offer to its customers.
“The reduction in the base rate is a New Year gift to the bank’s loyal customers, as a large number of consumers who have their loans linked to the base rate will benefit. This reduction is part of the bank’s efforts to ensure transmission of the reduction in policy rates of the recent past,” Gupta said.
A HAPPY NEW YEAR FOR BORROWERS…
- SBI’s revised base rate is now at 8.65%, while BPLR is now 13.40%
- 1-year MCLR stands unchanged at 7.95%
- About 8 mn customers will benefit by the base rate cut
- Move expected to be followed by other banks
- SBI to also extend waiver on home loan processing fee till March 31
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