SBI lowers interest rates on home loans, fixed deposits

State Bank of India (SBI), the country's largest lender, has announced a further 5 basis point reduction in its benchmark lending rates across all tenors. Simultaneously, the bank also announced a cut in interest rates on term deposits by 10-50 bps.

Accordingly, SBI said, its marginal cost of funds-based lending rate (MCLR) will be reduced by 0.5 percentage points, effective 10 February.
Beginning 10 February, SBI’s MCLR for the on-year tenor will stand reduced to 7.85 per cent from the existing 7.90 per cent, according to an SBI statement.
This is the ninth consecutive reduction in the key lending rates by SBI this financial year.
SBI also will cut interest rates on retail term deposits or fixed deposits by 10-50 bps and bulk term deposits by 20-50 bps across tenors, according to the statement.
SBI said the action was "in view of surplus liquidity in the system".
SBI’s decision to cut lending rates is irrespective of the Reserve Bank of India's Monetary Policy Committee’s (MPC) decision to keep RBI’s repo rate unchanged at 5.15 per cent. 
Repo rate is the interest rate at which the RBI lends money to commercial banks.
RBI, however, reduced the cash reserve ratio for banks, leaving more cash with them to lend. 
The impact of recent RBI policy measures and reduction in deposit rates will be reflected in the next review of MCLR, SBI said.