SBI Passes Entire 75 Bps Rate Cut to Borrowers; Also Cuts Deposit Interest Rates By 20 bps to 50bps
Moneylife Digital Team 28 March 2020
In a major relief for its customers, the State Bank of India (SBI) has decided to pass on the entire 75 basis points (bps) rate cut announced by the Reserve Bank of India (RBI) to its retail borrowers. At the same time, SBI also decided to reduce interest on deposits by 20bps to 50bps. 
 
In a statement, the bank said that the new rates will come into effect from 1 April 20. The borrowers availing loans based on external benchmark-linked lending rate (EBR) and repo-linked lending rate (RLLR) would be eligible for lower rates.
 
"Responding to RBI's extraordinary monetary policy measures to support the wider economy, SBI passes on the entire 75 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)," it said.
 
The SBI has reduced the external benchmark-linked lending rate to 7.05% per annum from 7.80% and the repo-linked lending rate to 6.65% per annum from 7.40% per annum.
 
Consequently, EMIs on eligible Home Loan accounts (linked to EBR or RLLR) would get cheaper by around Rs52 per Rs1 lakh on a 30-year loan.
 
Further, in view of adequate liquidity in the system and the additional liquidity measures announced by the RBI on Friday, the SBI said that it would realign its interest rate structure on deposits with effect from 28 March 2020.
 
The bank reduced its retail term deposit interest rates by 20 bps to 50bps across tenors and bulk term deposit interest rates by 50 bps to 100 bps across tenors.
 
"Decision on MCLR will be taken when the ALCO meets in April 2020. The impact of recent RBI policy measures and reduction in the Bank's deposit rates will be reflected in the next review of MCLR," said the statement.
 
In a bid to mitigate the impact of the coronavirus pandemic on the India economy, RBI Governor Shaktikanta Das on Friday announced a 75 bps cut in repo rate to 4.4%.
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