Image Source: Amar Ujala

Agencies

The country's largest state-run State Bank of India (SBI) has given a big gift to customers. SBI has cut the external benchmark based rate (EBR). After the cut, it has come down from 8.05 per cent to 7.80 per cent. It has decreased by 25 bps. The new rates are effective from January 1, 2020. SBI has decided to link all floating rate loans of MSME, housing and retail loans to EBR. This will greatly benefit the customers. This is because the EMI of their home loan will decrease. The interest rate will now start from 7.90% per annum on taking a home loan. Earlier this rate was 8.15 percent.

Earlier in December, State Bank of India gave a big gift to customers. In the same month, SBI cut the one-year Marginal Cost of Lending Rate (MCLR) by 10 bps. After which the rate has come down from eight percent to 7.90 percent. The new rates came into effect from 10 December 2019. Along with this, SBI also changed the MCLR in November. SBI had then cut the one-year MCLR by five bps. After which the rate was reduced from 8.05 percent to eight percent.

The RBI has set four benchmarks. First is the RBI repo rate. Second, the central government has a three-year Treasury Bill Yield. The third is a six-month treasury bill by the central government and the fourth is any other benchmark rate by the FBIL.

In addition to the repo rate decision, the RBI had estimated GDP. According to the central bank, GDP will fall further during 2019-20 and may fall from 6.1 per cent to five per cent. This has shocked the economy.