Good news for borrowers as India's largest bank worth Rs 70700000 crore reduces interest rates by...

Days after the RBI's policy rate cut, India's biggest bank, State Bank of India (SBI), has reduced its lending rate by 50 basis points. The move comes as relief for borrowers as it makes loans cheaper for both existing and new customers. With the latest round of reduction, the Repo Linked Lending Rate (RLLR) of SBI would come down by 50 basis points to 7.75 per cent. SBI has also reduced the External Benchmark Based Lending Rate (EBLR) by similar basis points to 8.15 per cent from 8.65 per cent earlier. The bank currently has a market cap of Rs 7.07 lakh crore, as of June 16. The share price of the bank closed at Rs 792.85 on Monday.

Revised rates from June 15

According to updated rate information on SBI's website, the revised rates come into effect from June 15, 2025. The rate reduction is in response to the June 6 RBI jumbo rate cut by 50 basis points to support growth, which hit a four-year low of 6.5 per cent in FY25. Following the RBI action, most of the banks have slashed lending rate remaining will follow suit soon.

The RBI's six-member monetary policy committee, headed by Governor Sanjay Malhotra and consisting of three external members, voted five to one to lower the benchmark repurchase or repo rate by 50 basis points to 5.5 per cent. It also cut the cash reserve ratio by 100 basis points to 3 per cent, adding Rs 2.5 lakh crore to already surplus liquidity in the banking system by December this year.

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Deposit rates cut

SBI also cut deposit rates by 25 basis points across all maturities for fixed deposits up to Rs 3 crore. The new term deposit rates are effective from June 15. With the revision, for fixed deposits, the interest rate on 1-2 year term deposits will be lower by 25 basis points to 6.50 per cent, and deposits having two years to less than 3 years maturity will attract 6.45 per cent as against 6.70 per cent.

In case of fixed deposits with maturity 3-5 years, interest rate has been reduced by 25 basis points to 6.30 per cent, while for 5-10 years by 25 basis points to 6.05 per cent. The interest rate of a specific tenor scheme of '444 days' (Amrit Vrishti) has also been revised from 6.85 per cent to 6.60 per cent, effective from June 15, 2025. Senior citizens are offered an additional 50 bps, while super senior citizens are eligible for an additional 60 basis points over the card rate.

(With inputs from PTI)