The country’s largest banks State Bank of India (SBI) and Indian Overseas Bank (IOB) have reduced their loan interest rates by 25 basis points after the reduction in policy interest rates by the Reserve Bank. With this, both new and old customers will get the direct benefit of cheap loans. According to SBI, after the latest cut, the bank’s external benchmark-linked rate i.e. EBLR will now be 7.90%. The new rates will be applicable from December 15, 2025.
This step has been taken at a time when RBI has reduced the repo rate by 25 basis points for the fourth time this year, to boost economic growth. SBI has also reduced its Marginal Cost of Funds-Based Lending Rate (MCLR) by 5 basis points for all tenors.
Know the rates
- 1 year MCLR: 8.75% → 8.70%
- 5 bps reduction in rates of other periods also
- Also, the bank has reduced the base rate/BPLR from 10% to 9.90%.
Slight amendment on FD also
- SBI has reduced the interest rate on fixed deposits with tenure of less than 2 to 3 years to 6.40%.
- Special FD scheme 444 days (Amrit Vrishti) rate has been reduced from 6.60% to 6.45%.
- Rates on FDs with other maturities have been kept unchanged, indicating that the bank is still under pressure to attract deposits.
IOB also reduced loan interest rates
- Government bank Indian Overseas Bank i.e. IOB has also given big relief to its customers by implementing new rates from December 15, 2025.
- Repo Linked Lending Rate (RLLR): 8.35% → 8.10%
- MCLR also reduced by 5 bps for periods ranging from 3 months to 3 years.
Big relief to customers – EMI will be less
Home loan, vehicle loan and personal loan customers will directly benefit from the reduction in interest rates of both SBI and IOB. EMI of consumers of all these categories will be reduced. Besides, the cost of loan for MSME and corporate customers will also reduce, which will increase the availability of working capital, make business operations easier and accelerate investment.
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