State Bank of India (SBI) has also declared that it would lower its lending rates by up to 25 basis points, which benefited the customers by offering them the advantages of the recent repo rate cut by the reserve bank of India (RBI). The action will be taken in an effort to make loans more affordable to new and existing borrowers in different segments.
According to the new rates, the external benchmark lending rate of SBI has reduced to 7.90 percent against its previous 8.15 percent, which is a reversal of 25 basis points. Another move that the bank has made is lowering its marginal cost of funds-based lending rate (MCLR) by 5 basis points on all tenors, which now stands at 8.70%. MCLR has been cut by 5 basis points to 8.75 on loans whose maturity is one year. Moreover, the base rate has been changed by a margin of 10 basis points and is currently doing 9.90.
Besides the reduction in lending rate, SBI has also announced that it would lower its interest rates on fixed deposit (FD) by 5 basis points on the deposits with maturity of two to three years to 6.40. Such amendments will come into force on Monday, 15 December 2025.
The adjustments in the rates come after the fourth rate cut of the RBI in 2025 declared on 5 December taking the benchmark repo rate to 5.25%. Indian economy has demonstrated remarkable resilience in its monetary policy statement by the RBI Governor Sanjay Malhotra who pointed out that in an unfavorable and challenging external environment, the Indian economy has managed to be very resilient. He observed that the inflation prospects have given the central bank ample breathing space where the policy can be used to spur economic growth without affecting the prices.
The move by SBI to forgo the rate reduction is likely to positively affect the borrowers who are seeking home loans, personal loans, and business loans to ease the burden of repayments.
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