The country’s largest government bank, State Bank of India (SBI), and Indian Overseas Bank (IOB) have announced a reduction in loan interest rates, offering relief to their customers.
The decision comes after the Reserve Bank of India (RBI) recently cut the repo rate by 25 basis points.
The new rates will come into effect from December 15, 2025, benefiting both existing and new borrowers.
SBI and IOB Cut Loan Interest Rates
Last week, the RBI cut its policy interest rate for the fourth time this year to boost economic growth.
SBI responded by lowering its lending rates, with the aim of passing on the full benefit of the RBI’s move to its customers.
25 Basis Points Cut in EBLR
According to reports, SBI has reduced its External Benchmark Linked Rate (EBLR) by 25 basis points, bringing it down to 7.90%.
Borrowers with home loans, personal loans, or other retail loans linked to EBLR will see a drop in their EMIs. New borrowers will also benefit from lower interest rates.
MCLR Reduced Across Tenures
SBI has also cut its Marginal Cost of Funds-based Lending Rate (MCLR) by 5 basis points, applicable to all tenures.
Base Rate and BPLR Lowered
SBI has reduced its Base Rate and Benchmark Prime Lending Rate (BPLR) from 10% to 9.90%, effective December 15, 2025, benefiting even existing loan accounts.
While loan rates have dropped, fixed deposit (FD) rates have seen minimal change. For FDs with tenures of 2 to 3 years, the interest rate has been reduced by 5 basis points to 6.40%, while other tenures remain unchanged. This indicates that the bank is still focusing on attracting deposits.
‘Amrit Vrishti’ FD Scheme Rate Cut
SBI’s special FD scheme, ‘444 Days Amrit Vrishti’, has also seen a rate reduction from 6.60% to 6.45%, effective December 15, 2025.
IOB Also Cuts Lending Rates
The Indian Overseas Bank (IOB) has reduced its External Benchmark Lending Rate (Repo Linked Lending Rate – RLLR) by 25 basis points, bringing it down from 8.35% to 8.10%.
MCLR Cut by 5 Basis Points
IOB’s Asset Liability Management Committee (ALCO) has approved a 5-basis point reduction in MCLR for tenures ranging from 3 months to 3 years. This will make various loans cheaper for customers.
SBI and IOB Cut Loan Interest Rates: Benefit to Customers
These rate cuts will reduce EMIs for home loans, vehicle loans, and personal loans, easing the financial burden on borrowers.
MSME and corporate customers will also benefit from lower interest rates, helping them meet working capital needs and boosting business growth.
