India banks cut lending rates after surge in deposits

Mumbai

INDIAN banks, led by market leader State Bank of India (SBI), announced sharp cuts to their lending rates after a recent surge in deposits, raising hopes that lower borrowing costs will help spark credit growth in Asia's third-largest economy.

SBI, the country's biggest lender by assets, said on Sunday that it had cut its so-called marginal cost of funds-based lending rates (MCLR) by 90 basis points, while unveiling new products for mortgage loans, one of the fastest-growing areas. Several other lenders including Punjab National Bank , Union Bank of India, Kotak Mahindra Bank and Dena Bank also cut their lending rates by 45-90 basis points across tenures. Analysts expect more lenders to follow suit.