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- Special 400-day scheme offering 7.3%: Withdrawn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
