SBI reduces interest rates by up to 50 bps, loans set to get cheaper

The State Bank of India (SBI) on Monday reduced its lending rate by 50 basis points following the Reserve Bank's policy rate cut. This move by country's biggest lender would make loans cheaper for both existing and new borrowers. The bank said that 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 percent in FY25.

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 State Bank of India revised interest rates come into effect from June 15, 2025, as per the updated rate information on SBI's website.

Besides, SBI also cut deposit rates by 25 basis points across all maturities for fixed deposits up to Rs 3 crore.

SBI's new term deposit rates are effective from June 15.

With the revision, for fixed deposits, SBI's 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 percent as against 6.70 percent.

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 (SBI Amrit Vrishti) has also been revised from 6.85 percent to 6.60 percent, 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.

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.Following the RBI action, most of the banks have slashed lending rate remaining will follow suit soon.

Earlier, HDFC bank had also cut its lending rate to offer a maximum interest rate of 6.6% per annum on Fixed Deposits with principal amount less than Rs 3 crore for general citizens. This was lower than the 6.85% maximum interest rate which was earlier offered by the bank.Also, state-owned Union Bank of India announced a reduction in its lending rate by 50 basis points in line with the rate moderation done by RBI. Union Bank said in a statement that the changes included downward revision of External Benchmark Lending Rate (EBLR) and Repo Linked Lending Rate (RLLR) by 50 basis points.