SBI News | 14 June | SBI Slashes Home Loan & EBLR by 50 bps After RBI’s Rate Cut: What It Means for You
SBI News | June 14, 2025 | CreditSamadhaan.com News Desk |
In a decisive step aimed at boosting borrowing and economic momentum, the State Bank of India (SBI) — India’s largest public sector bank — has reduced its External Benchmark Lending Rate (EBLR) and home loan interest rates by 50 basis points (bps). This move, effective June 15, 2025, mirrors the RBI’s recent repo rate cut of 50 bps, underscoring a shift toward a more accommodative monetary environment.
This development comes as welcome news for millions of homebuyers, retail borrowers, and small business owners across the country. Amid rising concerns over affordability and slowing credit demand, SBI’s rate cut is expected to stimulate loan growth while making borrowing more attractive for consumers with healthy credit scores.
SBI’s Revised Lending & Deposit Rates: A Quick Snapshot | SBI News
| Product | Old Rate | New Rate (from June 15, 2025) |
|---|---|---|
| External Benchmark Lending Rate (EBLR) | 8.65% | 8.15% |
| Home Loan Interest Rate Range | 8.00–8.95% | 7.5–8.45% (based on credit score) |
| Special Deposit Scheme (444 days) | 6.85% | 6.60% |
According to revised data on SBI’s official website, home loan interest rates will now vary between 7.5% to 8.45%, depending on the borrower’s CIBIL score and risk category. A top SBI official confirmed,
“We have passed on the entire repo rate cut to our borrowers. This reaffirms our support for India’s credit growth and financial inclusion objectives.”
What Is EBLR and Why Is It Crucial for Borrowers?
The External Benchmark Lending Rate (EBLR) is the foundation upon which many loan products — including home, auto, and personal loans — are priced. Introduced in October 2019 by the RBI to increase transparency and transmission of policy rate changes, EBLR is directly linked to the RBI’s repo rate.
The final lending rate offered to the borrower =
EBLR + Credit Risk Premium (CRP) + Business Strategy Premium
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Credit Risk Premium (CRP): Based on borrower’s credit score and risk profile
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Business Strategy Premium: Internal policy pricing by the bank
Thus, a fall in the repo rate results in a directly proportional decline in EBLR-linked interest rates, making EMIs cheaper for borrowers holding floating-rate loans.
Impact on Home Loan Borrowers: Credit Score Matters More Than Ever | SBI News
The new rate structure rewards borrowers with excellent credit profiles. Here’s how it plays out:
| CIBIL Credit Score Range | Expected Home Loan Rate |
|---|---|
| 800 and above | As low as 7.50% |
| 700–799 | Around 7.95% |
| Below 700 | Up to 8.45% |
Why this matters:
Borrowers with a strong credit history can save thousands of rupees in interest over the loan tenure. A reduction of 0.50% in interest on a ₹50 lakh loan for 20 years can lower your EMI by nearly ₹1,600/month — a saving of ₹3.8 lakh over the loan tenure.
Fixed Deposit Investors: Lower Yields Ahead
While borrowers celebrate, fixed deposit investors face a downside. SBI has trimmed the interest rate on its popular special deposit scheme (444 days) — known as Amrit Vrishti — by 25 basis points, bringing it down from 6.85% to 6.60%.
🔸 Standard domestic term deposits (below ₹3 crore) remain unchanged for now, but according to senior SBI executives, these rates are under review, indicating a possible downward revision in the near future.
Stock Market Response and Financial Sector Outlook | SBI News
On June 13, 2025, SBI’s stock closed at ₹792.35 on the BSE, down ₹13.60 (-1.69%). Analysts attribute this dip to investor concerns about shrinking Net Interest Margins (NIMs) in the coming quarters.
💬 CareEdge Ratings’ Insight:
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NIMs may decline by 20–25 bps in FY26, compared to FY25
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This is due to loan yields dropping faster than the cost of deposits
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Result: Short-term pressure on bank profitability, but long-term growth in loan demand
Expert Opinion from CreditSamadhaan.com
“SBI’s rate cut is timely and aligns perfectly with the RBI’s monetary easing. It not only strengthens access to affordable housing finance but also rewards financially disciplined borrowers. On the flip side, investors depending on fixed income from FDs should diversify their portfolios to hedge against future rate drops.”
– CreditSamadhaan.com Strategy Team
Key Takeaways for You | SBI News
✅ Lower EMIs starting June 15, 2025 for existing SBI home loan customers
✅ Affordable borrowing for new applicants with strong credit profiles
✅ CIBIL score continues to be the key to unlock best interest rates
✅ FD investors should prepare for further yield compression
✅ SBI maintains market leadership by full transmission of repo rate cut
What Should You Do Next?
🔹 Borrowers: Reassess your home loan — consider refinancing if you’re paying higher interest elsewhere.
🔹 FD Investors: Explore hybrid mutual funds, debt instruments, or tax-free bonds for better yield.
🔹 New Homebuyers: This is the ideal time to apply — combine low rates with festive offers ahead.
🔹 Credit-Conscious Citizens: Work on improving your credit score to qualify for premium rates.
