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SBI Cuts Rates: How Lower Loan and Deposit Costs Impact Your Wallet

The State Bank of India has announced a marginal reduction in key lending and select deposit rates, effective December 15. This move will lower borrowing costs for home, auto, and MSME loans linked to benchmarks like MCLR and EBLR. However, it also means slightly lower returns on certain retail term deposits for customers. The bank's decision comes amid improved financial performance in the public sector banking space.

Key Points: SBI Reduces Lending and Retail Deposit Rates From Dec 15

  • SBI cuts MCLR rates across all tenors by 5 basis points, easing loan costs
  • External Benchmark Lending Rate (EBLR) reduced by 25 bps to 7.90% for floating loans
  • Select retail term deposit rates trimmed, including the 444-day 'Amrit Vrishti' scheme
  • Changes apply to domestic retail deposits below Rs 3 crore, MCLR, EBLR, and Base Rate
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SBI cuts lending, retail deposit rates from Dec 15

SBI cuts key loan and deposit rates from Dec 15, lowering EMIs for home, auto, and MSME loans while reducing select term deposit returns.

"The bank reduced the popular 444‑day ‘Amrit Vrishti’ deposit rate to 6.45 per cent from 6.60 per cent. - SBI Statement"

New Delhi, Dec 13

The State Bank of India (SBI) has announced marginal reductions in key lending benchmarks and select term deposit rates, effective from December 15.

The bank reduced the rate on 2 to less than 3 years tenor to 6.40 per cent from 6.45 per cent. Senior citizens will receive a 50 bps premium over it, and their rate was cut to 6.90 per cent from 6.95 per cent. Other retail term deposit slabs were kept unchanged, a statement said.

The changes affect domestic retail term deposits below Rs 3 crore, the Marginal Cost of Funds‑based Lending Rate (MCLR), the External Benchmark Linked Rate (EBLR) and the Base Rate.

The bank reduced the popular 444‑day “Amrit Vrishti” deposit rate to 6.45 per cent from 6.60 per cent.

The SBI also eased borrowing costs of home, auto and MSME loans by reducing or Marginal Cost of Funds based Lending Rate (MCLR) rates across all tenors by 5 basis points.

The MCLR rate overnight and one‑month was reduced to 7.85 per cent, three months to 8.25 per cent, six months to 8.60 per cent, one year to 8.70 per cent, two years to 8.75 per cent and three years to 8.80 per cent.

Further, the External Benchmark Lending Rate (EBLR) used to price many floating‑rate retail loans was lowered by 25 basis points to 7.90 per cent from 8.15 per cent. The Base Rate or BPLR for a small segment of legacy borrowers was cut to 9.90 per cent from 10.00 per cent, effective the same day.

Earlier this week, the government informed that there has been no capital infusion by the government in public sector banks since the financial year 2022-23, as they have significantly improved their financial performance to turn profitable and strengthened their capital position.

Meanwhile, the reduction in goods and services tax (GST) is expected to cut consumer price index (CPI) inflation by roughly 25 basis points in the September–November 2025 period and could reduce 35 basis points this fiscal (FY26), State Bank of India (SBI) said in a report.

- IANS

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Reader Comments

S
Sarah B
As someone looking to buy a car next month, the 5 bps cut in MCLR is welcome news! Every little bit helps with the EMIs. SBI leading the way again. Hope other banks follow suit soon.
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Priyanka N
The cut in the 'Amrit Vrishti' scheme from 6.6% to 6.45% is significant. I had just advised my uncle to invest in it. Now I have to give him the bad news. For senior citizens, every 0.05% matters a lot. Banks should think about them more.
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Aman W
This is a clear signal that RBI might cut repo rates soon. SBI is usually the first mover. Lower borrowing costs should help MSMEs, which is the backbone of our economy. Positive step overall. 👍
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Karthik V
While lower loan rates are good, the article also mentions banks are profitable and don't need govt capital. So why cut deposit rates so aggressively? It feels like profits are being prioritized over the common depositor. A more balanced approach would be better.
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Meera T
The link to lower GST potentially reducing inflation is interesting. If inflation comes down, maybe we will see more such rate cuts. For now, I'll wait and watch before deciding on a new FD. Bhagwan jaane kya hoga aage!

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