To cash in on the forthcoming festive seasons and to better utilise the excess liquidity, State Bank of India announced the fifth rate cuts on Monday by another 10 basis points across tenors, effective Tuesday.

With this lending rate reduction, the bank has lowered 40 bps so far this fiscal year in five successive rate cuts beginning April. The new rates are effective Tuesday, the nation's largest lender said in a statement.

Accordingly, the one-year marginal cost-based lending rate – to which all its retail lending rates are linked, is down to 8.15 per cent from 8.25 per cent earlier – is the lowest in the industry now.

The bank, which has linked almost all its loan and deposit products to the repo rate, has also slashed its retail term deposit rates by a higher 20-25 bps and bulk term deposit rates by 10-20 bps across tenors, effective Tuesday.

The lender attributed the falling interest rate scenario and surplus liquidity for realigning its loan and deposit pricing.

In April when it had slashed the first time by 5 bps, its one-year MCLR was at 8.55 per cent. Similar cuts were effected in May and July, while it went in for for a higher 15 bps reduction in August, yanking down the benchmark rate to 8.25 per cent. And with the latest cut, it's down to a multi- year low of 8.15 percent – the lowest in the industry.

Its nearest rivals HDFC Bank and ICICI Bank offer 8.30 and 8.35 per cent, respectively, after their 10 bps reduction in the past two weeks.

However, it can be noted that lending rates are still much higher than the RBI's benchmark rate of 5.40 percent – which is at a nine-year low after in four successive moves, the central bank cut the repo rates by a cumulative 110 bps since February.