After the Reserve Bank of India (RBI) reduced the repo rate, several banks followed suit by lowering interest rates on loans.
This move has brought relief to customers with home loans, car loans, and personal loans.
Among them, the State Bank of India (SBI), the country’s largest bank, has also reduced its home loan interest rates, including the External Benchmark Based Lending Rate (EBLR) and Repo Linked Lending Rate (RLLR).
This decision will benefit customers with loans linked to EBLR and RLLR, as their EMIs will decrease.
However, SBI has kept the Marginal Cost Based Lending Rate (MCLR), Base Rate, and Benchmark Prime Lending Rate (BPLR) unchanged.
SBI cuts EBLR and RLLR
SBI uses the External Benchmark Lending Rate (EBLR) to set interest rates for various loans, including home loans.
The bank has reduced the EBLR by 25 basis points (bps) from 9.15% to 8.90%, making home loans more affordable.
Since October 1, 2019, SBI has used the repo rate as the external benchmark for its floating rate home loans.
Additionally, SBI has cut the Repo Linked Lending Rate (RLLR) by 25 bps from 8.75% to 8.50%, which will lower the cost of home loans and business loans for customers.
Decision in RBI’s Meeting
The decision to cut the repo rate was made during the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting.
The repo rate was reduced from 6.50% to 6.25%, marking the first cut in nearly five years.
The RBI had previously raised the repo rate by 250 basis points following the Covid-19 pandemic.
