SBI Reduces Lending Rates by 75 bps, Also Cuts Fixed Deposit Rates

SBI Reduces Lending Rates by 75 bps, Also Cuts Fixed Deposit Rates

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  • SBI cuts interest rates by 75 bps, effective from 1 April ,2020.
  • The new external benchmark-linked lending rate stands at 7.05% from 7.80%. 
  • Repo rate-linked lending rate at 6.65% from 7.40% respectively.
  • The reduction in rates is positive for loan borrowers.
  • Those depending on fixed deposits will see a sharp drop in their earnings.
  • SBI offers senior citizens’ an additional 50 basis point interest rate across all tenors.

State Bank of India (SBI) has announced a cut of 75 basis points in its external benchmark-linked lending rate as well as the repo-linked lending rate. The bank has also reduced its interest rates on deposits by 20-50bps and on bulk deposits by 100 bps. The new external benchmark-linked lending rate stands at 7.05% from 7.80% and the repo rate-linked lending rate at 6.65% from 7.40% respectively.

This big move came soon after RBI has announced a reduction of the same magnitude in the repo rate.  In a statement late on Friday, the country’s largest bank by assets said that with the latest cut, it passed on the entire benefit of the 75-basis point cut by the RBI. SBI said the news lending rates will take effect from April 1, 2020.

The move comes on the back of the RBI making available to banks Rs 3.74 lakh crore through a host of measures. The reduction has brought down interest rates on home loans by up to Rs 30 lakh to 7.95%. SBI said that it would factor in the loan-to-value, whether there is a woman borrower and the risk grade of the borrower before arriving at the final rate. 

However, the reduction in rates is positive for loan borrowers, those depending on fixed deposits will see a sharp drop in their earnings. This is the second interest rate cut on fixed deposits by SBI in a month. 

“Responding to the RBI’s extraordinary monetary policy measures to support the wider economy, the bank passes on the entire 75 basis points (bps) repo rate cut to its borrowers availing loans linked to external benchmark-linked lending rate (EBR) as well as repo-linked lending rate (RLLR),” SBI said in a statement.

Moreover, SBI is also offering senior citizens’ an additional 50 basis point interest rate across all tenors. After today’s revision, senior citizens will get 4% to 6% on FDs maturing in 7 days to 10 years.

Latest SBI FD Interest Rates for General Public Effective, 28 March 2020

Fixed Deposit TenureInterest Rates
7 days to 45 days3.5%
46 days to 179 days4.5%
180 days to 210 days5%
211 days to less than 1 year5%
1 year to less than 2 year5.7%
2 years to less than 3 years5.7%
3 years to less than 5 years5.7%
5 years and up to 10 years5.7%

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