The State Bank of India (SBI) on Friday announced marginal cuts in key lending benchmarks and select term deposit rates. The move is expected to ease borrowing costs for retail and small business customers. The revised rates will come into effect from December 15.
As part of the changes, SBI reduced interest rates on domestic retail term deposits below Rs 3 crore for the 2-year to less-than-3-year tenor to 6.40%, down from 6.45%. Senior citizens, who receive a 50 basis point premium over the applicable rate, will now earn 6.90%, compared with the earlier 6.95%. The bank said that other retail term deposit slabs remain unchanged.
SBI also lowered the rate on its popular 444-day special deposit scheme, “Amrit Vrishti”, by 15 basis points to 6.45% from 6.60%.
Relief for home, auto and MSME loans
On the lending side, the country’s largest lender reduced its Marginal Cost of Funds-based Lending Rate (MCLR) across all tenors by 5 basis points. The reduced rates will provide relief to borrowers of home, auto and MSME loans linked to the benchmark.
Following the revision, the overnight and one-month MCLR stands at 7.85%, the three-month rate at 8.25%, the six-month rate at 8.60% and the one-year MCLR at 8.70%. The two-year and three-year MCLR have been cut to 8.75% and 8.80%, respectively.
SBI lowers EBLR
In a more significant move, SBI lowered its External Benchmark Linked Rate (EBLR), which is used to price many floating-rate retail loans, by 25 basis points to 7.90% from 8.15%. The bank also trimmed its Base Rate, or BPLR, applicable to a small set of legacy borrowers, to 9.90% from 10%.
The rate revisions come against the backdrop of improved financial health in public sector banks. Earlier this week, the government informed Parliament that it has not infused capital into state-run banks since FY23, citing sustained profitability and stronger capital positions.
Separately, SBI said in a recent report that a reduction in goods and services tax (GST) could help moderate inflation, estimating a potential 25 basis point easing in the consumer price index between September and November 2025 and a 35 basis point impact in FY26.