SBI announces external benchmark rate cut by 25 bps

State Bank of India (SBI) has recently announced a 25 basis points cut in its external benchmark rate. The move comes after RBI maintained status quo on policy rates.

As per SBI’s press release, the revised effective benchmark lending rate (EBR) of 7.8% (down from 8.05 percent) has come into effect from January 1, 2020. New home buyers will get loans at an interest rate starting from 7.9% a year.
However, it must be noted that as per RBI’s circular, banks can add a risk premium to EBR before dispersing loans to customers. So, far this year, SBI has cut one-year MCLR on loans by 65 bps. From October 1, 2019, any personal, housing or auto loan etc. taken by customers from a bank will be linked to any one of the 4 external benchmarks specified by the Reserve Bank of India (RBI).