It has also cut its base rate by 0.10 per cent.
“This is to inform that the bank has decided to reduce the base rate from 9.85 per cent to 9.75 per cent and marginal cost of funds based lending rates applicable for multiple tenors has been revised with effect from September 20, 2020,” the bank said in a regulatory filing.
The benchmark one-year MCLR, which is mainly factored in to decide most consumer loan rates, has been reduced to 8.20 per cent from 8.25 per cent.
Rates for all other tenor loans, from overnight to six-month period, have been reduced by a similar quantum each to the range of 7.80 – 8 per cent, the private sector lender said.
While base rate is calculated based on the average cost of funds, MCLR is based on the marginal or incremental cost of funds.
MCLR came into effect from April 2016 in accordance with the RBI mandated new interest rate calculation regime in order to facilitate effective transmission of policy rate actions.
Stock of SIB closed 1.42 per cent down at Rs 6.95 a piece on BSE.