India’s largest lender, State Bank of India, cut lending and deposit rates on Friday after the Reserve Bank of India significantly reduced the repo rate earlier today the economic fallout from the coronavirus pandemic.
The SIB reduced its lending rates by 75 basis points, fully passing on the lower RBI repo rates.
Therefore, the lender has also reduced the interest rates on retail and bulk deposits between 20 and 100 basis points for different grades.
“The lowering of rates concerns borrowers availing loans on the basis of the loan rate linked to an external benchmark and the loan rate linked to pensions,” the bank said in a statement. The new rates, which will take effect on April 1.
The EBR was reduced to 7.05% per year, against 7.80% per year, while the RLLR went from 7.40% per year to 6.60% per year.
The bank said that the equivalent monthly payments (EMI) on eligible home loan accounts (linked to EBR or RLLR) would cost around 52 rupees per 1 lakh rupees on a 30-year loan.
In the seventh bimonthly monetary policy announced on Friday, the RBI reduced the repo rate by 75 basis points, the largest decline in 15 years, to 4.40% from 5.15%.