State Bank of India, the country's largest lender, has reduced its one-year MCLR by 10 basis points on Monday, effective December 10. This is the eighth consecutive cut in MCLR by SBI in the fiscal year 2019-2020.

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With the latest cut, SBI's one-year MCLR comes down to 7.90 percent per annum from 8 percent with effect from 10th December 2019.

The move will reduce interest rates on SBI home loans and personal loans.

Last week, the Reserve Bank of India (RBI) kept the key policy repo rate unchanged at 5.15 percent after reducing it for five consecutive times this year.

RBI Governor Shaktikanta Das expected the transmission to improve with the introduction of the external benchmark system, as most banks have linked their lending rates to the policy repo rate of the Reserve Bank.

"Already, the weighted average term deposit rate has fallen by 16 bps. Overall liquidity in the system remains in sizable surplus. This augurs well for transmission to lending rates, going forward," Governor Das said in his fifth bi-monthly monetary policy statement.

First Published:Dec 9, 2019 11:27 AM IST