SBI cuts EBLR, home loan rates by 50 bps after RBI's policy rate cut

SBI reduces EBLR and home loan rates by 50 basis points and special deposit scheme rate by 25 basis points, effective from 15 June 2025, following RBI's repo cut

The country’s largest lender, State Bank of India (SBI), on Friday reduced its External Benchmark Lending Rate (EBLR) and home loan rate by 50 basis points, keeping with Reserve Bank of India’s half per cent cut in policy repo rate. The revised EBLR would be 8.15 per cent as against the old rate of 8.65 per cent.

 

According to revised data on SBI’s website, its home loans rate -- which is linked to EBLR -- would be in the range of 7.5-8.45 per cent based on the credit score of the borrowers.

 

The lender also reduced the interest rate on the special deposit scheme (444 days) by 25 basis points. The revised rates will be effective from June 15, 2025.

 

“We have passed an entire cut in repo rate,” a senior SBI executive said.

 

EBLR works as a benchmark for pricing various loans and its calculation takes into account Credit Risk Premium reflecting the risk associated with a borrower's credit profile and Business Strategy Premium.

 

On the deposit side, the bank reduced the interest rate of the special deposit scheme ‘Amrit Vrishti’ (444 days) by 25 bps from 6.85 per cent to 6.60 per cent with effect from June 15, 2025, SBI website showed. 

The card rates for domestic retail term deposits (those below ₹ three crore) have not been changed for now. Last month, SBI had reduced the interest on term deposits across maturities by 20 basis points. Bank is still reviewing these rates, SBI executive said.

 

Meanwhile, rating agency CareEdge in a statement said deposit raising remains competitive, especially low-cost Current Account Savings Account (CASA) deposits.

 

Further, a reduction in deposit rates by banks would reduce the cost of deposits with a lag of two-three quarters, impacting the net interest margins (NIMs) for the financial year 2026 (FY26).

 

Indian banks would see pressure on NIM.

 

It is expected to decline around 20-25 bps in FY26 compared to FY25 due to a declining interest rate scenario, with yield on advances expected to fall higher than the cost of deposits, the agency added.