India’s largest lender, State Bank of India (SBI), has reduced its lending rates following the Reserve Bank of India’s recent policy rate cut.
Effective December 15, 2025, this move will make loans more affordable for both existing and new borrowers.
SBI’s External Benchmark Linked Rate (EBLR) has been reduced by 25 basis points, bringing it down to 7.90%.
This is a significant benefit for borrowers whose loans are linked to the EBLR.
MCLR and Other Rates Also Reduced
Along with the EBLR cut, SBI has also reduced its Marginal Cost of Funds-based Lending Rate (MCLR) by 5 basis points across all tenors.
For example, the one-year MCLR is now 8.70%, down from 8.75%.
The bank has also revised other lending rates:
Base Rate/BPLR: Reduced from 10% to 9.90%
Fixed Deposit (FD) rates: Cut by 5 basis points to 6.40% for maturities between two and three years
Special scheme “Amrit Varshi” (444-day FD): Rate reduced from 6.60% to 6.45%
Other maturity buckets for FDs 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 has cut its External Benchmark Lending Rate (EBLR), specifically the repo-linked lending rate (RLLR), by 25 basis points, bringing it down to 8.10%.
Additionally, IOB has reduced its MCLR by 5 basis points for all tenors ranging from three months to three years.
These changes will lower EMIs for both existing and new borrowers with loans linked to these benchmarks.