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Home loans get cheaper as SBI cuts base rate by 40 bps to 9.3%

Bank will also cut deposit rates by 25 bps effective Oct 5

BS Reporter  |  Mumbai 

SBI cut base rate by 40 bps to 9.3%

India's largest lender, State Bank of India has cut by 40 basis points to 9.3%, making it lowest in the country.

is the benchmark rate to which all other lending rates are linked. With this, equated monthly installments on home loans, car loans etc will come down.

ALSO READ: Housing finance stocks gain post RBI policy

The bank has also said that it will cut further by 25 basis points which will be effective from October 5.

This comes after Reserve Bank of India (RBI) cut its by 50 basis points to 6.75%. is the rate at which borrow from the RBI.

ALSO READ: Top 5 implications of RBI's 50 bps rate cut

RBI governor has been asking to pass on the reduced costs to consumers.

In this calendar year, RBI has reduced by 125 basis points but banks, on an average, have reduced the by only 25-30 basis points.

Bankers had earlier said that the increase in bad loans has been putting pressure on the margins as increasingly the interest-earning assets are slipping into the non-performing class. This in turn has deterred from cutting loan rates.

However, with the 50 bps rate cut now more banks are expected to reduce their base rate.

First Published: Tue, September 29 2015. 15:07 IST