SBI cuts home loan interest rate by up to 0.25 percent

State-run State Bank of India on Sunday cut its home loan interest rate by 0.25 percent -- or up to 25 basis points -- for new borrowers while for women borrowers the rate has been aligned to the base rate of 9.85 percent per annum.

The SBI also said in a statement that for other borrowers, the interest rate will be 9.90 percent -- five basis points higher than the base, or the minimum, lending rate.

The rates will be applicable for all new home loans sanctioned on or after April 13, the statement added.

"Interest rate on the bank's home loans was 10.10 percent for Women under 'HER Ghar' and 10.15 percent for others," SBI said.

The interest rate for the bank's existing floating rate home loan borrowers has also been reduced up to the reduction in the bank's base rate to 9.85 percent effective April 10.

The revised EMI per lakh for a loan of 30 years will be Rs.867 for women under 'HER Ghar' and Rs.871 for others, as against Rs.885 and Rs.889, respectively, earlier, SBI said.

HDFC Ltd had on Friday reduced its home loan rate by 0.2 percent to 9.9 percent for both new and existing borrowers.

Last week, many banks including SBI, ICICI Bank, HDFC Bank and Axis Bank cut their lending rates by up to 0.25 percent, following Reserve Bank of India Governor Raghuram Rajan's message to bankers on the matter.

While keeping the RBI interest rate unchanged at 7.5 percent in its monetary policy on Tuesday, Rajan said he was waiting also for the commercial banks to pass on the benefits of two repo rate cuts to borrowers and described as "nonsense" the banks' claims that the cost of funds was high.

"The banks' marginal cost of funding has fallen. The notion that it hasn't fallen, is nonsense... it has fallen," Rajan had said.