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SBI Reduces MCLR and Introduces Special Deposit for Senior

In Business
May 08, 2020

Country’s largest lender State Bank of India (SBI) has announced the reduction in its MCLR by 15 bps across all tenors. The one year MCLR comes down to 7.25% p.a from 7.40% p.a. with effect from May 10, 2020. This is the twelfth consecutive reduction in bank’s MCLR.

Consequently, EMIs on eligible home loan accounts (linked to MCLR) will get cheaper by approx. Rs 255.00 for a 30 year loan of Rs. 25 lakh. In view of adequate liquidity in the system as well as with the Bank, SBI prunes its interest rates on Retail term deposits by 20 bps for ‘upto 3 Years’ tenor, effective from May 12, 2020.

To safeguard the interests of Senior citizens in the current falling rate regime, the Bank introduces a new product ‘SBI Wecare Deposit’ for Senior Citizens in the Retail TD segment. Under this new product, an additional 30 bps premium will be payable for Senior Citizen’s Retail term deposits with “5 Years &; above” tenor only. This scheme would be in effect upto September 30, 2020.

Thus, the effective rate of interest for Retail TDs of Senior Citizens will be:
 For Retail TD of ‘below 5 years’ tenor: 50 bps higher than the rate applicable for the general public (no change in premium)
 For Retail TD of ‘5 years & above’ tenor (new product): 80 bps higher than the rate applicable for the general public (30 bps extra premium). This additional premium will not be payable in case of premature withdrawal of such deposits.