SBI makes loans cheaper after RBI rate cut; slashes FD returns for depositors

Days after the Reserve Bank of India’s (RBI) policy rate cut, the State Bank of India (SBI) on Monday slashed its lending and deposit rates, making loans cheaper for borrowers and marginally reducing returns for depositors.

SBI reduced its Repo Linked Lending Rate (RLLR) by 25 basis points (bps) to 8.25%, and the External Benchmark Based Lending Rate (EBLR) has been cut to 8.65%, effective April 15, 2025, according to updated information on the bank’s website.

The reduction comes after the RBI last week trimmed the key repo rate by 25 bps for the second consecutive time to spur growth amid external trade pressures and a challenging global economic outlook.

Lower returns on fixed deposits

The SBI has also lowered fixed deposit (FD) rates across tenures by 10-25 bps. For deposits up to ₹3 crore, the interest rate for 1-2 year FDs now stands at 6.70%, down from 6.80%, while the rate for deposits maturing in 2-3 years is reduced to 6.90% from 7%.

Bulk deposits above ₹3 crore have also seen revisions. The rate for 180-210 days maturity is now 6.40%, down 20 bps, while for 211 days to less than 1 year, the rate is 6.50%, a 25 bps cut. For 1-2 year and 2-3 year tenures, interest rates have been brought down to 6.80% and 6.75%, respectively.

SBI’s special green rupee term deposits and the 'Amrit Vrishti' 444-day scheme will now offer 10 bps lower returns than the regular card rate.

However, the 'Amrit Vrishti' scheme offers a 7.05% return, with senior citizens eligible for 7.55% and super senior citizens for 7.65%.

The transmission of the RBI’s rate cut has triggered similar actions across the banking sector.

Private lender HDFC Bank reduced its savings account interest rate by 25 bps to 2.75% for balances below ₹ 50 lakh. Balances above ₹ 50 lakh will now earn 3.25% interest, effective April 12.

Bank of India has withdrawn its 400-day special deposit scheme and lowered home loan rates by 25 bps to 7.9%. The revision, effective April 15, also applies to other retail loan products, including vehicle, personal, and education loans.

Other public sector banks such as Punjab National Bank (PNB), Indian Bank, UCO Bank, and Bank of Baroda (BoB) had earlier announced similar rate cuts in response to the RBI’s policy action.

BoB reduced its external benchmark-linked lending rates by 25 bps while keeping the Marginal Cost of Funds-Based Lending Rate (MCLR) unchanged at 9%. PNB lowered its RLLR from 9.10% to 8.85%, and Indian Bank brought down its RBLR to 8.70% from 9.05%.

The RBI’s Monetary Policy Committee, in a unanimous decision, cut the repo rate to 6% and shifted its stance from “neutral” to “accommodative,” hinting at potential further easing to support economic growth.