State Bank of India (SBI) on Friday revised its lending rates following the Reserve Bank of India’s latest 25-bps reduction in the repo rate.
The largest lender has reduced the external benchmark lending rate (EBLR), which is linked to the repo rate, to 7.90% from 8.15% with effect from December 15.
When the RBI announces a repo rate cut, banks adjust their EBLR accordingly, while transmission to marginal cost of funds (MCLR)-based lending rate takes time.
Full and Immediate Transmission via EBLR
SBI has also reduced its MCLR by 5 basis points across tenures – overnight to three years.
Marginal Cut to Deposit and MCLR Rates
It has also cut retail term deposit rates (below Rs 3 crore) for tenures from two to less than three years by 5 bps. The repricing of deposit rates comes with a lag, while lending rates adjust much faster.