New Delhi: The State Bank of India (SBI), the country’s largest public sector lender, has announced a 25 basis points (bps) reduction in its benchmark lending rates, effective December 15, following the Reserve Bank of India’s (RBI) recent repo rate cut. This decision is expected to bring direct EMI relief to millions of borrowers, particularly those with home loans and other retail loans, while also resulting in lower interest rates on select fixed deposit (FD) schemes.
SBI’s move signals faster monetary transmission in the banking system and reinforces the RBI’s intent to stimulate credit growth and consumer spending.
The RBI recently reduced its policy repo rate, citing:
Moderating inflation
Stable macroeconomic indicators
Need to support growth amid global uncertainties
As banks link most retail loans to external benchmarks, changes in the repo rate are now transmitted more quickly to borrowers compared to earlier regimes.
SBI has reduced:
External Benchmark Lending Rate (EBLR)
Repo Linked Lending Rate (RLLR)
These benchmarks are directly linked to the RBI repo rate, ensuring automatic rate adjustments.
| Benchmark | Before Cut | After Cut (Dec 15) | Change |
| RBI Repo Rate | Higher | Lower | -25 bps |
| SBI EBLR | Repo + spread | Reduced | -25 bps |
| SBI RLLR | Repo + spread | Reduced | -25 bps |
Note: Final loan rates vary based on credit score, loan type, and risk category.
The following loans will see rate reductions if linked to EBLR/RLLR:
Home loans
Auto loans
Personal loans
Education loans
MSME and small business loans
| Loan Amount | Tenure | Rate Cut | Approx. EMI Reduction | Annual Savings |
| ₹30 lakh | 20 years | 25 bps | ₹450–₹550 | ₹5,400–₹6,600 |
| ₹50 lakh | 20 years | 25 bps | ₹750–₹900 | ₹9,000–₹10,800 |
| ₹75 lakh | 25 years | 25 bps | ₹1,100–₹1,300 | ₹13,200–₹15,600 |
| ₹1 crore | 30 years | 25 bps | ₹1,600–₹1,800 | ₹19,200–₹21,600 |
Automatic benefit if the loan is externally benchmarked
EMI reduction applies from the reset date
Option to keep EMI the same and reduce tenure
Lower starting interest rates
Better affordability
Higher loan eligibility due to lower EMIs
SBI has also revised FD rates downward on select tenures, including its popular Amrit Vrishti Fixed Deposit scheme, reflecting the softer interest rate environment.
| FD Scheme | Tenure | Earlier Rate | Revised Rate |
| Amrit Vrishti FD | Special tenure | Higher | Reduced |
| Regular FD | 1–2 years | Higher | Slightly lower |
| Regular FD | 2–3 years | Higher | Reduced |
| Senior Citizen FD | Same tenures | Higher | Slightly reduced |
Senior citizens will continue to receive additional interest, though overall returns may soften.
RBI floating rate bonds
Debt mutual funds
Laddered FD strategy
Boosts housing demand
Improves affordability
Encourages retail credit growth
Signals easing cycle continuation
May prompt other banks to follow
SBI cuts lending rates by 25 bps
Effective from December 15
Home loan EMIs to decline
Retail & MSME loans impacted
FD rates revised downward
Faster transmission of the RBI policy
SBI reduced rates to align with the RBI’s repo rate cut and to stimulate borrowing and economic growth.
Borrowers with EBLR/RLLR-linked loans will see benefits from December 15 or their next reset date.
No, fixed-rate loans are not impacted unless converted to floating rates.
Lower rates make this an attractive period for new loans, but refinancing should be evaluated based on charges and tenure.
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