With housing loans linked to the repo rate since July, there will be a straight benefit of 35 basis points from the repo cut announced in the Reserve Bank's MPC policy on August 7, State Bank of India Chairman Rajnish Kumar told CNBC-TV18 report.
Kumar pointed out if loan rates have to come down, deposit rates cannot remain very high, adding SBI cannot afford to keep offering the existing deposit rates. The bank will review deposit rates in the next Asset Liability Committee meeting, he said.
With regard to the Reserve Bank of India’s (RBI) decision to cut the repo rates and its impact on the Marginal Cost of Funds based Lending Rate (MCLR), he said, “I have maintained that repo rate and MCLR have no connection.”
“If the repo rate goes down to 5 percent, then one-year MCLR can’t be offered at its current levels,” he said, adding that SBI has headroom for growth as its credit-deposit ratio is on the lower side.
He believes NBFCs, which are retail-focused, will benefit from measures announced by the RBI in the policy.
Kumar also spoke about the stressed assets cases the bank is battling. On DHFL, he said, “We will try and achieve a resolution without going to the NCLT. We will look at a resolution that satisfies all creditors with respect to DHFL.”
SBI cut its marginal cost-based lending rates by 15 basis points within hours of a steeper 35 basis points reduction in the repo rates by the Reserve Bank to 5.4 percent in its fourth consecutive MPC policy. The revised lending rates will be effective August 10 across all tenors.
The bank's new one-year MCLR will come down to 8.25 percent from 8.40 percent per annum, the lender said in a statement.
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