Customers of the country’s largest bank, SBI, have received good news regarding their loan EMIs or FD returns. The State Bank of India (SBI) today announced a historic reduction in key lending rates and some term deposit rates, effective December 15th. Following the Reserve Bank of India’s (RBI) policy repo rate cut, SBI has reduced interest rates by up to 25 basis points. This reduction will reduce EMIs for existing customers and make loans cheaper for new customers. SBI’s External Benchmark Linked Rate (EBLR) has now fallen to 7.90 percent.
All types of loans have become significantly cheaper
SBI has reduced its Marginal Cost of Funds Based Lending Rate (MCLR) by 5 basis points across all tenors. The one-year MCLR, a key benchmark for many loans, has now fallen to 8.70% from 8.75% previously. Rates have also been reduced for other tenors, including overnight, one-month, and three-year MCLR.
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In addition, the bank has announced a significant reduction in its External Benchmark Linked Rate (EBLR), which applies to most floating-rate retail loans, such as home loans. The EBLR has been reduced by 25 basis points from 8.15% to 7.90%. For existing loan borrowers, SBI has also reduced its base rate from 10.00% to 9.90%. For customers, these changes mean potential relief in loan EMIs, especially for EBLR-linked home loan borrowers whose interest rates are set to reset soon.
FD Rate Reduction Also Impacts
Talking about deposits, most retail term deposit rates below ₹3 crore have remained unchanged, providing investors with stable returns across most tenors. However, SBI has reduced the interest rate on its popular 444-day ‘Amrit Varsha’ term deposit scheme to 6.45% from the earlier 6.60%, which is a blow to investors. For senior citizens, rates remain higher across all tenors, although there has been a marginal reduction in the 2-3 year deposit slab from 6.95% to 6.90%. For the general public, the rate for the same tenor has been reduced to 6.40% from 6.45%.
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