State Bank of India (SBI), the country's largest lender, has cut its benchmark lending rates by five basis points, thereby reducing home loan rates. The marginal cost of fund-based lending rate (MCLR) now stands at 8.40 per cent for the one-year tenor, down from 8.45 per cent, effective from today. In the current financial year, this is SBI's third rate cut.

Two days back Reserve Bank of India Governor Shaktikanta Das had said that he expects faster transmission of the three successive repo rate cuts.

In June, the RBI's Monetary Policy Committee (MPC) had reduced repo rate by 25 basis points to 5.75 per cent. The RBI had also reduced the repo rate in February and April this year.

The SBI is providing home loans at the interest rates linked to the repo rate. This means any changes in the key interest rate by the central bank would be passed to customers.

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