The public lender said it is reducing Marginal Cost-based Lending Rate (MCLR) by 5-10 basis points to 6.65 per cent for short-term loans from July 10. 

SBI said that the reduction in three-month MCLR is in line with its External Benchmark-based Lending Rate. (Photo: Reuters)

The country’s largest public lender State Bank of India (SBI) on Wednesday announced that it has reduced its key lending rate for short-term loans.

The public lender said it is reducing Marginal Cost-based Lending Rate (MCLR) by 5-10 basis points to 6.65 per cent for short-term loans from July 10.

The bank said it is the 14th consecutive reduction in MCLR and that the new lending rate will be applicable on loans with a term of up to three months. However, the cut in lending rate will not apply to loans with longer tenure.

SBI said its move is aimed at boosting credit and reviving demand. It added that its MCLR continues to be at the lowest level that is being currently offered in the market.

The bank also said that the reduction in three-month MCLR is in line with its External Benchmark-based Lending Rate.

It may be noted that the Reserve Bank of India (RBI) had in May slashed key repo rate to four per cent. This has allowed many banks to lower their MCLRs in line with its external benchmark.

Last month, SBI had reduced its MCLR by 25 basis points across all tenors.

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