State Bank of India (SBI), the country’s largest lender, has announced a significant reduction in its lending rates following the Reserve Bank of India’s recent policy rate cut.
Effective December 15, 2025, both existing and new borrowers will benefit from lower loan costs.
SBI’s External Benchmark Linked Rate (EBLR) has been reduced by 25 basis points to 7.90%, making loans more affordable for customers.
Other Rate Cuts by SBI
SBI has also reduced the Marginal Cost of Funds-based Lending Rate (MCLR) by 5 basis points across all tenors.
For instance, the one-year MCLR will now be 8.70%, down from 8.75%.
The bank has also lowered the Base Rate/BPLR from 10% to 9.90%.
Fixed deposit rates have been slightly adjusted as well.
Rates for deposits between two and three years have been cut by 5 basis points to 6.40%, and the interest rate for the Amrit Varshi scheme (444-day duration) has been reduced from 6.60% to 6.45%.
Rates for other deposit maturities remain unchanged.
Indian Overseas Bank Follows Suit
Another state-owned lender, Indian Overseas Bank (IOB), has also reduced its lending rates effective December 15, 2025.
The bank’s repo-linked lending rate (RLLR) has been cut by 25 basis points from 8.35% to 8.10%, passing on the full benefit of the RBI’s policy rate cut.
IOB has also approved a 5 basis point reduction in MCLR for all tenors ranging from three months to three years.
These changes will lower EMIs for both existing and new borrowers whose loans are linked to these benchmarks.
This move by SBI and IOB aims to make borrowing cheaper for customers, reduce EMI burdens, and boost credit flow across the economy.
