New Delhi, April 7: State Bank of India on Tuesday cut the marginal cost of funds based lending rate (MCLR) by 35 bps across all tenors from April 10 to tackle economic crisis erupted due to coronavirus outbreak. The one-year MCLR comes down to 7.40 percent per annum from 7.75 percent with effect from April 10, 2020, the country's largest lender said in a statement. Coronavirus Effect: India's GDP May Slip Below 3% in FY21 if COVID-19 Proliferates, Says KPMG Report.

The one-year tenor is the benchmark against which most of the consumer loans are priced. Borrowers will be benefitted from this move as MCLR-linked floating rate loans will get cheaper. SBI Said, “Consequently, EMIs on eligible home loan accounts (linked to MCLR) will get cheaper by around Rs 24.00 per 1 lakh on a 30 year loan.”

It is for 11th consecutive that SBI announced cut in MCLR in FY 2019-20. Last month, the country’s largest lender had also cut its MCLR by up to 15 basis points across various tenors. The public sector bank had also reduced retail term deposits (less than Rs 2 crore) by 10 to 50 basis points for a few tenors in its earlier announcement.

SBI’s decision to cut MCLR came days after the Reserve Bank of India (RBI) reduced the repo rate by 75 basis points. Similarly, the reverse repo rate was also reduced by 90 basis point. The repo rate was reduced from 5.15 percent to 4.4 percent. The reverse repo rate was slashed to 4 percent.

The economic crisis has deepened in India after the Narendra Modi government imposed a 21-day countrywide lockdown to prevent the spread of coronavirus. The lockdown is hampering the economy of the country as the offices and markets are closed. The government allowed only the sale of essential goods in the country.

A KPMG predicted that India's growth could slip below three percent in the current fiscal if COVID-19 proliferates within the country. It said the three major contributors to GDP -- private consumption, investment and external trade -- will all get affected due to the spread of the pandemic.

(With inputs from PTI)

(The above story first appeared on LatestLY on Apr 07, 2020 06:50 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).