SBI Reduces Interest Rate On Loans By 0.5%

New Delhi, June 16, 2025

SBI (State Bank of India), the country’s largest lender, has announced a cut in its lending and deposit rates w.e.f. June 15. The announcement comes in respect to the central bank’s announcement of repo rate cut by 50 basis points 10 days ago. SBI lowered lending rates (RLLR & EBLR) by 50 bps or 0.5%, resulting in lower EMIs for existing and new borrowers. It will also result in lower ROIs (Return on Investment) for depositors.

On June 16, 02:45 PM, the bank’s share was trading 0.21% up (₹794.05 a piece).

Lending Rates Reduced by 50 Basis Points

In a significant move to make loans more affordable, SBI has cut its Repo Linked Lending Rate (RLLR) by 50 basis points, bringing it down to 7.75%. The External Benchmark Based Lending Rate (EBLR) has also been reduced by a similar margin, now at 8.15%, down from the earlier 8.65%. It is an excellent opportunity for SBI to manage narrower interest spreads and must balance liquidity with profitability.

This rate revision comes in response to the RBI’s monetary policy decision on June 6. The central bank lowered the benchmark repo rate by 50 basis points to 5.5%, its sharpest cut in years. Additionally, the Cash Reserve Ratio (CRR) was slashed by 100 basis points to 3%, injecting an estimated ₹2.5 lakh crore of additional liquidity into the banking system by December 2025.

The aim is to spur credit-led economic growth. However, it will depend on a variety of other factors, including borrowers’ appetite and banks’ willingness to offer loans.

Fixed Deposit Rates Also Trimmed

SBI has also reduced its fixed deposit (FD) rates by 25 basis points across all tenures for deposits up to ₹3 crore. The revised rates, also effective from June 15, are as follows:

• 1 to 2 years: down from 6.75% to 6.50%
• 2 to less than 3 years: cut to 6.45% from 6.70%
• 3 to 5 years: revised to 6.30%
• 5 to 10 years: reduced to 6.05%
• ‘Amrit Vrishti’ (444 days): lowered from 6.85% to 6.60%

Senior citizens receive an additional 50 basis points, while super senior citizens are offered an extra 60 basis points over the standard card rates.

Wider Impact Expected Across Banking Sector

Following SBI’s lead, most other banks are expected to revise their lending rates in the coming days. The RBI’s aggressive rate cut aims to revive economic momentum, which slowed to a four-year low of 6.5% in FY25.

This step will increase credit demand, and the deposit returns will be lowered marginally.

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