SBI (State Bank of India) has announced a new reduction in the base rate which is the previous benchmark for lending along with the Benchmark Prime Lending Rate or BPLR. The reduction is of 30 basis points. This move will definitely be a welcome development for those customers whose home loans are still tied to these earlier benchmarks. The base rate has been changed to 8.65% with effect from the 1st of January, 2018 in comparison to the previous base rate of 8.95%.
This will benefit a whopping 80 lakh customers across India as per reports. The Benchmark Prime Lending Rate is now at 13.40% as compared to 13.70% previously. All loans in rupees that were sanctioned from the 1st of April, 2016, were tied to the MCLR (marginal cost of funds based lending rates) and hence existing home loan customers had the option to change from the base rate to the MCLR rates for home loans.
State Bank of India has cut its base rates but the MCLR is still the same. The 1-year benchmark MCLR stands at 7.95% currently. State Bank of India will also be giving its waiver on the processing fees for home loans till the 31st of March, 2018 for all its new customers who want to buy a home and also for those who are thinking of transferring their home loans to SBI.