SBI Reduces Lending Rates by 25 Basis Points Following RBI Policy Cut: What Borrowers Need to Know

The revised lending rates will take effect from December 15, according to SBI's announcement.

New Delhi:

State Bank of India (SBI), the nation's largest lender, has announced a reduction in its lending rate by 25 basis points, following the Reserve Bank's policy rate cut. This move will make loans more affordable for both existing and new borrowers.

With this latest reduction, SBI's External Benchmark Linked Rate (EBLR) will decrease by 25 basis points to 7.90 percent.

The new rates will become effective from December 15, 2025, as stated in SBI's official communication.

This rate reduction comes in response to the RBI's decision last week to cut the key interest rate by 25 basis points, marking the fourth such reduction this year aimed at supporting economic growth.

SBI has also reduced its Marginal Cost of Funds-Based Lending Rate (MCLR) across all tenures by 5 basis points. Following this revision, the one-year maturity MCLR will decrease to 8.70 percent from the current 8.75 percent.

Similarly, the one-year maturity rate will be reduced by 5 percent to 8.75 percent and 8.80 percent, respectively.

The bank has also lowered its Base Rate/BPLR to 9.90 percent from the existing 10 percent, effective from December 15.

Additionally, SBI has decided to reduce fixed deposit rates by 5 basis points for maturities ranging from 2 years to less than 3 years, bringing the new rate to 6.40 percent effective December 15.

However, the bank has maintained interest rates on other maturity periods, suggesting pressure on deposit mobilization.

The interest rate for the specific tenor scheme '444 days' known as Amrit Vrishti has been revised from 6.60 percent to 6.45 percent, effective December 15.

Another state-owned bank, Indian Overseas Bank (IOB), has also announced a reduction in its lending rates, effective December 15, 2025.

IOB has reduced its External Benchmark Lending Rate (EBLR) - specifically the Repo Linked Lending Rate (RLLR) by 25 basis points from 8.35 percent to 8.10 percent, thereby fully passing on the policy rate cut to its customers.

Additionally, IOB's Asset Liability Management Committee (ALCO) has approved a 5-basis-point reduction in the Marginal Cost of Funds-Based Lending Rate (MCLR) across tenors from three months to three years.

These revisions will lower Equated Monthly Installments (EMIs) for both existing and new borrowers whose loans are linked to these benchmarks.

Retail customers seeking home, vehicle, and personal loans will benefit from improved affordability. MSMEs and corporate borrowers will also experience a reduction in their cost of funds, supporting their working capital requirements and business growth.