SBI has not changed the interest rate on term deposits for now. In November 2019 it had reduced deposit rates by 15 and 75 basis points on account of adequate liquidity in the system.
Similarly, Bank of India has reduced it's overnight MCLR by 20 bps and other maturity MCLR's by 10 bps with effect from December 10, 2019.
Overnight MCLR has been reduced from 7.95% to 7.75%, one month MCLR has been slashed from 8.20% to 8.10%, three month MCLR from 8.25% to 8.15%, while 6 month and 1 year MCLR from 8.30% to 8.20%.
The Reserve Bank of India, in its monetary policy review last week, said monetary transmission (of 135 basis points) had been full and reasonably swift across various money market segments and the private corporate bond market.
Credit market transmission for loans disbursed by banks
remains delayed but is picking up. The one-year median MCLR has declined by 49 basis points, RBI added.
The transmission is expected to improve going forward, as the share of base rate loans, interest rates on which have remained sticky, declines; and MCLR-based floating rate loans, which typically have annual resets, become due for renewal, RBI said.
After the introduction of the external benchmark system, most banks
have linked their lending rates to the policy repo rate of the Reserve Bank.
Overall liquidity in the system remained in surplus in October and November 2019. This was despite an expansion of currency in circulation due to festival demand. Average daily net absorption under the Liquidity Adjustment Facility (LAF) amounted to Rs1,98,566 crore in October, RBI said in policy.