Rate Cut 2025

Background

• In response to the Reserve Bank of India‘s 50 basis points reduction in the repo rate, leading Indian banks have revised their lending and deposit interest rates.
• These changes are effective mid-April 2025 and mark the first major rate realignment in several years.

Lending Rate Reductions

• State Bank of India (SBI)
  • Repo rate-linked lending rate: Cut by 25 basis points to 8.25%
  • External benchmark lending rate (EBLR): Reduced to 8.65%
  • Effective from: April 15, 2025
• Bank of Maharashtra
  • External benchmark rate: Reduced to 8.65%
• Bank of India
  • Home loan rate: Cut by 25 basis points to 7.9%

Deposit Rate Reductions

• SBI Fixed Deposit (FD) Rates for Senior Citizens
  • 1–2 years: Reduced from 7.3% to 7.2%
  • 2–3 years: Reduced from 7.5% to 7.4%
  • Effective from: April 15, 2025
• Bank of India FD Rates (< ₹3 crore)
  • 91–179 days: 4.25%
  • 180 days–<1 year: 5.75%
  • 1 year: 7.05%
  • 1–2 years: 6.75%
• Bank of India FD Rates (₹3 crore–<₹10 crore)
  • 91–179 days: 5.75%
  • 180–210 days: 6.25%
  • 211 days–<1 year: 6.50%
  • Special 400-day scheme offering 7.3%: Withdrawn
• HDFC Bank Savings Deposit Rates
  • < ₹50 lakh: Reduced to 2.75%
  • ≥ ₹50 lakh: Reduced to 3.25%
  • Effective from: April 12, 2025
  • First rate cut in nearly three years

Implications

• Borrowers may benefit from lower EMIs for home and personal loans
• Senior citizens and savers may see reduced returns on fixed deposits
• Reflects a shift toward a more accommodative monetary policy to spur economic activity