Good news for borrowers: SBI cuts external benchmark lending rate, details here

State Bank of India on Monday reduced its external benchmark based rate (EBR) by 25 basis points to 7.8% p.a. from 8.05% p.a. with effect from January 1.

“With this reduction, interest rate for existing home loan customers as well as MSME borrowers who have availed loans linked to external benchmark based rate would come down by 25 bps,” the bank said. New home buyers will get loans at interest rates starting from 7.9% p.a., it added.

SBI’s external benchmark based lending rate is linked to the repo rate, which is currently at 5.15% after the December monetary policy review. The rate is fixed at repo rate plus 265 basis points. RBI had mandated that banks link all new floating rate loans to an external benchmark like repo rate from October 1.