This is SBI's third rate cut in the current financial year

SBI or State Bank of India, the country's largest lender by assets, has reduced its benchmark lending rates by five basis points across all tenors. One basis point is equivalent to 0.01 per cent or 1/100th of a per cent. The marginal cost of fund-based lending rate, or the MCLR, will now stand at 8.40 per cent for the one-year tenor, down from 8.45 per cent, with effect from July 10, 2019, SBI said in a statement. This is SBI's third rate cut in the current financial year. With this MCLR cut, the reduction in the home loan rates since April 10 is 20 basis points, noted SBI.

The development comes a day after Reserve Bank of India Governor Shaktikanta Das said he expects faster transmission of the three successive repo rate cuts.

Reserve Bank of India's Monetary Policy Committee (MPC) had lowered key lending rate or repo rate by 25 basis points or 0.25 per cent to 5.75 per cent in June, which marked the third straight reduction of 25 basis points in the central bank's bi-monthly policy review. The RBI had reduced the repo rate each in its policy reviews in February and April this year.

Last month, the SBI had said it would offer repo rate-linked home loans from July 1. A repo rate-linked home loan means that any changes in the key interest rate by the central bank would be passed on directly to the customers.

SBI has a market share of around 35 per cent in home loans and auto loans, according to the bank.