State Bank of India (SBI), the country’s largest lender, has reduced its lending rate by 50 basis points for repo-linked loans and external benchmark linked loans after the Reserve Bank of India on June 6 announced a jumbo 50 basis points reduction in rates along with a 100 basis points reduction in Cash Reserve Ratio nudging the banks to pass on the benefits to borrowers by lowering their interest rates.
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.
It 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 revised rates come into effect from June 15, 2025, according to the bank’s website.
SBI, however, has kept the Marginal Cost of Funds based Lending Rate (MCLR) unchanged with 1-year and 3-year MCLR at 9 per cent and 9.10 per cent, respectively.
The bank had informed analysts at the fourth quarter earnings call that 29 per cent of the asset book is repo-linked, while almost 50 per cent of the asset book is MCLR and fixed-rate loans.
SBI has also cut deposit rates by 25 basis points across all maturities for fixed deposits up to ₹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 a maturity 3-5 years, the 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.
Several banks such as Bank of Baroda, Punjab National Bank, Uco Bank and Bank of India have announced a reduction in their repo-linked lending rates.
On the deposit side, HDFC Bank, ICICI Bank and Kotak Mahindra Bank have lowered their FD rates as well.
Faster UPI
UPI transactions are set to become faster from Monday with National Payments Corporation of India (NPCI) mandating a reduction in response time to as swift as 10 seconds for payments.
According to a recent NPCI circular, transactions including money transfer, status checks, and reversals will now be completed in 10 to 15 seconds as against 30 seconds.
The time taken in a UPI payment to validate the address will now take only 10 seconds compared with 15 seconds earlier.