State Bank of India has slashed interest rates on home loan starting from January 1 2017, by reducing the marginal cost of funds based lending rate (MCLR) by 90 basis points across all maturities.
The home loans reduction varies for gender and amount. Home loans are linked to one-year MCLR and therefore new home loan borrowers can be assured of the rate for at least 12 months, IB Times reported.
The increased rate of bank deposit after the demonetisation move resulted a surge in bank revenue. 12.4 lakh crore have been deposited with banks till December 10.
“There is huge liquidity with the bank due to the large flow of deposits. This has driven us to reduce lending rates, which, hopefully, will kickstart credit demand and growth,” SBI chairman Arundhati Bhattacharya told media.
Punjab National Bank and Union Bank of India also slashed their MCLR rates on Sunday. PNB reduced its lending rate by 70 base points while Union Bank reduced by 65 basis points to 90 basis points across different maturities, Business Standard reported.