SBI (State Bank of India) has definitely brought some good cheer to customers in recent times with some major announcements. This is akin to a festive season in advance for home loan borrowers who are seeking lower interest rates and tenors in turn.
SBI cuts home loan interest rates
SBI (State Bank of India) has reduced its rates of interest in recent times. Here’s taking a look at what customers should keep in mind:
- SBI has lowered its MCLR (marginal cost of funds based lending rate) by 5 basis points recently for all loan tenors.
- This will reduce the rate of home loan interest for all SBI customers.
- Post this latest reduction in interest rates, MCLR for 1 year will lower to 8.45% per annum as compared to 8.50% per annum previously.
- Interest rates on all home loans tied to the MCLR will be lowered by 5 basis points and this will be implemented from the 10th of May, 2019, onwards.
- This is the second cut in home loan interest rates by SBI within just a month.
- The 1-year MCLR had been lowered by 5 basis points on the 10th of April, 2019 by the bank post the announcement of the monetary policy by the RBI.
- SBI had also lowered the rate of interest by 10 basis points for home loans up to Rs. 30 lakh.
From the 1st of May, 2019, the biggest Indian bank, State Bank of India (SBI), shifted to a new regime for interest rates on big savings account deposits and also for short-term loans. SBI linked its rate of interest on savings accounts with balances exceeding Rs. 1 lakh and short-term loans such as cash credit and overdraft to the RBI (Reserve Bank of India) repo rate. Rates of interest on big savings account deposits and short-term loan rates will be changing automatically whenever the repo rate is changed by the RBI. This will naturally facilitate swifter transmission of the rates towards customers.
The repo rate is now at 6% after successive reductions this year. The benchmark policy rate will be what links to overdrafts and cash credit accounts with limits surpassing Rs. 1 lakh along with a 2.25% spread. The total rate goes to 8.25% as a result. SBI will be charging a specific risk premium for loans which is over and above the 8.25% rate based on factors like the borrower’s risk profile. SBI is currently the biggest Indian bank with regard to overall deposits, assets, customers, branches and employees. The bank has stated that it possesses market share of 34% in auto and home loan segments.
Other key SBI announcements
Here are some of the other key announcements and decisions from SBI that you should also be aware of:
- Interest rates on savings accounts- Rates of interest will vary based on repo rate changes by the RBI as mentioned above. This will only apply for savings accounts with balances exceeding Rs. 1 lakh and the remaining accounts will get interest of 3.5% per annum.
- Charges- SBI has already updated its charges and fees for particular services. Rs. 100 + GST is the charge for stop payment instructions and also duplicate passbooks. Rs. 500 + GST is the charge for returned cheques due to insufficient funds. Transfer of home branch accounts does not merit any charges. Cheque returned charges for technical reasons are Rs. 150 + GST. Rs. 250 + GST is the charge for failed standing instruction in loan account. Signature verification requires Rs. 150 + GST and return of welcome kit/ATM card by courier owing to a wrong address is Rs. 100 + GST. For issuing of Demand Draft/Bankers’ Cheque, charges range between Rs. 4-50 inclusive of GST depending on the amounts. Savings account closure merits charges of Rs. 500 + GST in case of closure post 14 days up to 1 year of opening the same.
- Average balance maintenance- Not maintaining average balance merits penalties between Rs. 20-100 (plus GST) across rural, semi-urban and urban centres. In metro centre branches, minimum balance of Rs. 5,000 has to be maintained by customers. If the minimum balance is not achieved within a particular duration, charges may be recovered by the bank post notifying the holder of the account.
- Interest rates on FDs- FD interest rates have gone up for tenors of 1 year-less than 2 years while they have come down marginally for other long-term FDs. The new rate is effective from the 9th of May, 2019. For deposits lower than Rs. 2 crore, the rates are 7% for 1 year-less than 2 years and 6.75% for 2 years-less than 3 years. The rates are 6.70% for 3 years-less than 5 years and 6.60% for 5 years-10 years. Senior citizens will earn an extra 0.5% on FDs.
- Missed Call based Banking- You can activate this facility for your registered mobile number for the account. The SBI Quick App can be downloaded on BlackBerry, Windows, Android or iOS devices for accessing these facilities.
- SBI YONO- You can use this for purchasing insurance, bill payments, investments, booking tickets from IRCTC, loan applications and shopping among other activities. The app helps in cash withdrawal from ATMs minus cards, checking balances, adding of beneficiaries, creation of FDs and so on.
- Registering Grievances- The branch manager is to be contacted or the Toll Free Numbers which are 18004253800/1800112211. You can send an SMS to 8008202020 by typing UNHAPPY or submit your feedback/grievance online at sbi.co.in. You can also complain to email@example.com. In case of non-resolution of any grievances within 10 working days of the date of registration or you are unsatisfied with the resolution provided by SBI, the Network Nodal Officer can be contacted through the address provided by the branch. In case there is still no satisfactory resolution in sight, the Banking Ombudsman can be approached in this regard.