SBI Update: SBI has given a major relief to home buyers, cutting interest rates by 0.25 percent...

India's largest lender, State Bank of India (SBI), has cut its interest rates by 25 basis points following the Reserve Bank's policy rate cut, making loans cheaper for existing and new borrowers. With this fresh rate cut, SBI's external benchmark-linked interest rate (EBLR) will decrease by 25 basis points to 7.90 percent. SBI said in a statement that the revised rates will be effective from December 15, 2025. This interest rate reduction comes after the RBI's decision last week to cut the repo rate by 25 basis points for the fourth time this year to support growth.

SBI also made changes to other interest rates:
The bank has also reduced the MCLR for all tenors by 5 basis points. With this change, the MCLR for a one-year maturity will decrease from the current 8.75 percent to 8.70 percent.

The bank has announced that it has reduced the base rate/BPLR from the existing 10 percent to 9.90 percent, effective December 15.

The bank has also reduced the interest rate on fixed deposits of less than 2 years to 3 years by 5 basis points to 6.40 percent, effective December 15. However, the bank has kept the interest rates unchanged on other maturity period schemes, indicating pressure on deposit mobilization.

The interest rate on the special scheme of 444 days, Amrit Vrishti, has been revised from 6.60 percent to 6.45 percent, effective December 15.

IOB also offers interest rate relief
Another public sector bank, Indian Overseas Bank (IOB), has also announced a reduction in its lending rates, effective December 15, 2025. The bank has reduced its External Benchmark Lending Rate (EBLR) – specifically the Repo Linked Lending Rate (RLLR) – by 25 basis points, from 8.35 percent to 8.10 percent. Indian Overseas Bank (IOB) said in a statement that the full benefit of the repo rate cut is being passed on to customers. Additionally, the bank has approved a 5 basis point reduction in the Marginal Cost of Funds Based Lending Rate (MCLR) for all tenors ranging from three months to three years.

The bank stated that these revisions will result in lower EMIs for existing and new borrowers whose loans are linked to these benchmarks. Retail customers seeking home, vehicle, and personal loans will benefit from increased affordability. MSME and corporate borrowers will also experience a reduction in their cost of funds, which will help them meet working capital requirements and support business growth.

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