SBI cuts external benchmark-based lending rate by 25 bps to 7.80%

State Bank of India (SBI), the country's largest lender, today announced a 25 basis point reduction in its external benchmark-based lending rate to 7.80 per cent from 8.05 per cent at present.

“SBI has announced the reduction in its external benchmark-based rate (EBR) by 25 basis points to 7.80 per cent per annum from 8.05 per cent per annum with effect from effect from January 1, 2020," the bank said in a release, adding that the new rates will be applicable from 1 January 2020.
With this reduction, the interest rate for existing home loan customers as well as micro, small and medium enterprise (MSME) borrowers who have availed of external benchmark-based loans would come down by 25 basis points, it said. 
New home loans will come at an interest rate starting from 7.90 per cent per annum compared to earlier 8.15 per cent per annum, it said.
BI loans connected to external benchmark lending rates will become cheaper from January 1, 2020, as the country’s largest lender on Monday cut its external benchmark-based interest rates by 25 bps.
The move will reduce SBI's external benchmark rate to 7.8 percent per annum from 8.05 percent previously.
SBI had, in September, said that it adopted repo rate as the external benchmark for all floating rate loans for medium, small and macro enterprises, housing and retail loans as notified by the Reserve Bank of India on 4 September.
The central bank made it mandatory for banks to link retail loans like housing and automobile loans to an external benchmark. According to an RBI circular, the banks are free to choose one of the several indicated benchmarks.
Earlier in December, SBI had also deducted its one-year MCLR by 10 basis points, in its eighth consecutive cut in MCLR in the fiscal year 2019-2020.
With the latest cut, SBI's one-year MCLR comes down to 7.90 per cent per annum from 8 per cent with effect from 10 December 2019.