In a significant move aligning with the Reserve Bank of India’s recent 50 basis points cut in the policy repo rate, the State Bank of India (SBI) has lowered its External Benchmark Lending Rate (EBLR) by 50 basis points, bringing it down from 8.65% to 8.15%. The revised rates will come into effect from June 15, 2025, according to updated information on SBI’s official website.
With the EBLR acting as a key determinant for retail loan pricing, SBI has also adjusted its home loan interest rates, now ranging between 7.5% and 8.45%, depending on the borrower’s credit score. “We have passed on the full repo rate cut to our customers,” a senior SBI official confirmed.
The EBLR, which is used to price a variety of retail loans, factors in a Credit Risk Premium based on borrower profiles and a Business Strategy Premium.
In another revision, the bank has reduced the interest rate on its special fixed deposit scheme ‘Amrit Vrishti’ (444 days) by 25 basis points, lowering it from 6.85% to 6.60%, also effective from June 15, 2025. However, the card rates for domestic retail term deposits below ₹3 crore remain unchanged for now. Last month, SBI had already trimmed deposit rates across various tenures by 20 basis points, and further revisions are currently under review.
Meanwhile, CareEdge Ratings, in a recent note, highlighted the ongoing competitive environment in deposit mobilisation, particularly for low-cost Current Account Savings Account (CASA) funds.
The agency warned that despite the deposit rate reductions, net interest margins (NIMs) for banks could come under pressure in FY26, potentially declining by 20–25 basis points compared to FY25. This is attributed to the anticipated faster decline in loan yields relative to the cost of deposits amid a softer interest rate environment.