SBI: India’s largest bank – State Bank of India (SBI) – has reduced its lending rate by 25 basis points after policy rate cut by the Reserve Bank of India (RBI), which will make loans cheaper for new and existing borrowers.
SBI: Key Announcements
This brings the External Benchmark Linked Rate (EBLR) of SBI down by 25 basis points to 7.90 percent. In a statement, SBI said the revised rate will come into effect from December 15, 2025.
Last week, RBI slashed the key interest rate by 25 basis points for the fourth time in 2025 to support growth.
SBI went on to slash the Marginal Cost Of Funds-based Lending Rate (MCLR) by 5 basis points across all tenures. This means that the one-year maturity MCLR will fall to 8.70 percent from the existing 8.75 percent. The bank added a one-year maturity rate will now be cheaper by 5 percent to 8.75 percent and 8.80 percent, respectively.
The Base Rate/BPLR has been reduced to 9.90 percent from the existing 10 percent. SBI also announced a cut in the fixed deposit rate by 5 basis points for maturity 2 years to less than 3 years to 6.40 percent, effective from December 15.
IOB Announces Similar Reductions
The Indian Overseas Bank (IOB) also announced a reduction in lending rates, effective from December 15, 20025. The bank slashed its EBLR, specifically the Repo Linked Lending Rate (RLLR) from 8.35 percent to 8.10 percent to pass the policy rate cut benefits to its customers.
IOB’s asset liability management committee also approved a reduction of 5 basis points in the MCLR across tenors from 3 months to 3 years. These revisions are likely to significantly reduce EMIs for both new and existing borrowers whose loans are associated with these benchmarks.
Retail customers seeking personal, vehicle and home loans will benefit from improved affordability. The bank added corporate borrowers and MSMEs will benefit from a reduction in their cost of funds.
