SBI Cuts Home Loan Rates, Reduces Interest on Some Fixed Deposits Starting December 15

State Bank of India (SBI), the nation's largest lender, has announced reductions in both lending and deposit rates, offering some relief to borrowers while slightly decreasing returns on specific fixed deposits. The new rates take effect on December 15.

Regarding deposits, the interest rates for most retail fixed deposits below Rs 3 crore remain unchanged. That said, the reality is a bit more complicated. SBI has reduced the interest rate on its popular 444-day 'Amrit Vrishti' fixed deposit scheme from 6.60% to 6.45%. Senior citizens will continue to receive higher rates across all deposit durations, although the 2-3 year deposit slab has seen a small decrease from 6.95% to 6.90%. The rate for the general public for the same period has been lowered from 6.45% to 6.40%.

On the borrowing side, SBI has lowered its Marginal Cost of Funds-Based Lending Rate (MCLR) by 5 basis points across all tenures. The one-year MCLR, a key benchmark for many loans, is now 8.70%, down from 8.75%. Overnight, one-month, and three-year MCLR rates have also been reduced.

SBI has also announced a larger reduction in its External Benchmark Linked Rate (EBLR), which is applicable to most floating-rate retail loans, including home loans. The EBLR has been reduced by 25 basis points, from 8.15% to 7.90%. Furthermore, the Base Rate for existing borrowers has been lowered from 10.00% to 9.90%.

These changes will likely result in lower loan EMIs for customers, particularly for home loan borrowers whose loans are linked to the EBLR.