SBI cuts lending rates by 25 bps after RBI repo rate cut, EMIs to fall

Following the Reserve Bank of India’s (RBI) fourth 25-basis-point repo rate cut of 2025, several public-sector banks have reduced lending rates, passing on benefits to borrowers. Effective 15 December 2025, the revisions make loans cheaper for new and existing customers.

SBI has reduced its lending rate by 25 basis points, following the Reserve Bank's policy rate cut, making loans cheaper for existing and new borrowers.

With the latest round of reductions, the External Benchmark Linked Rate (EBLR) of SBI will fall by 25 basis points to 7.90 per cent.

The revised rates come into effect from December 15, 2025, SBI said in a statement.

The bank has also slashed the Marginal Cost of Funds-Based Lending Rate (MCLR ) across all tenures by 5 basis points. With the revision, the one-year maturity MCLR will fall to 8.70 per cent from the existing 8.75 per cent.

Similarly, a one-year maturity rate will be cheaper by 5 per cent to 8.75 per cent and 8.80 per cent, respectively, it said.

The bank has lowered the Base Rate/BPLR to 9.90 per cent from the existing 10 per cent, effective from December 15, it said.

These reductions mean lower EMIs for home, auto, personal, and business loans linked to EBLR or MCLR, providing relief to borrowers amid rising household and business expenses.

Revision in Marginal Cost of Funds Based Lending Rate (MCLR)

Revision in External Benchmark Linked Rate (EBLR)

Revision in Base Rate/BPLR

Indian Overseas Bank (IOB) lending rate cut

IOB has also reduced its Repo Linked Lending Rate (RLLR) by 25 basis points from 8.35% to 8.10%, fully passing on the RBI rate cut to its customers.

Other Banks

The RBI, for the first time in six months, reduced the benchmark repo rate by 25 basis points to 5.25%. All six members of the Monetary Policy Committee, chaired by Governor Sanjay Malhotra, voted in favour of the cut.

When the repo rate goes down, borrowing money becomes cheaper for banks because they pay less interest to the RBI. This enables them to reduce lending rates like the MCLR and base rate, making home loans, auto loans, and business credit more affordable. Lower interest costs reduce EMIs, stimulate borrowing, and help boost overall economic growth.