State Bank of India, the country's largest lender, has reduced its lending rate by 25 basis points following the Reserve Bank of India's policy rate cut, making loans cheaper for both existing and new borrowers.
With the latest revision, SBI's External Benchmark Linked Rate (EBLR) will come down by 25 basis points to 7.90 per cent.
The new rates will take effect from 15 December, 2025, the bank said in a statement.
The reduction comes in response to last week's RBI decision to slash the key interest rate by 25 basis points for the fourth time this year to support growth.
SBI has also lowered the Marginal Cost of Funds-Based Lending Rate (MCLR) across all tenures by 5 basis points.
The one-year maturity MCLR will fall to 8.70 per cent from the existing 8.75 per cent. Similarly, one-year maturity rates will be reduced to 8.75 per cent and 8.80 per cent, respectively.
The bank has revised its Base Rate/BPLR to 9.90 per cent from the existing 10 per cent, effective 15 December.
Fixed deposit rates for maturities from two years to less than three years have been cut by 5 basis points to 6.40 per cent, also effective 15 December.
However, SBI has retained interest rates on other maturity buckets, indicating pressure on deposit mobilisation.
The interest rate of the specific tenor scheme '444 days' under Amrit Vrishti has been revised from 6.60 per cent to 6.45 per cent.
Another state-owned lender, Indian Overseas Bank, also announced a reduction in its lending rates, effective 25 December, 2025.
The bank has reduced its External Benchmark Lending Rate, specifically the Repo Linked Lending Rate, by 25 basis points from 8.35 per cent to 8.10 per cent, fully passing the policy rate cut to its customers.
Additionally, IOB's Asset Liability Management Committee has approved a 5-basis-point reduction in the Marginal Cost of Funds-Based Lending Rate across tenors from three months to three years.
These revisions will lower Equated Monthly Instalments for both existing and new borrowers whose loans are linked to these benchmarks.
Retail customers seeking home, vehicle, and personal loans will benefit from enhanced affordability.
MSMEs and corporate borrowers will also experience a reduction in their cost of funds, aiding working capital requirements and supporting business growth.