The country’s largest public sector bank, the State Bank of India, has dropped 0.25% of its lending rates, making the External Benchmark Based Lending Rate (EBLR) 8.65%, down from 8.90%. This action is the result of RBI’s recent 25-basis-point repo rate cut. This cut in the EBLR will affect the EMI loans, reducing the payable amount. With the new EBLR set at 8.65%, borrowers now face a lower EMI of Rs 43,075 for a Rs 50,000,000 loan over 10 years. Previously, the EMI stood at Rs 46,685.
Along with EBLR, the RLLR (Repo Linked Lending Rate) has also been reduced to 8.25% from the previous 8.50%, excluding the Credit Risk Premium (CRP). The CRP is added to calculate the RLLR. But few banks may not even charge CRP if the customer has a good credit score, as CRP depends on the bank's decision.
With EBLR and RLLR being slashed down, the MCLR (Marginal Cost of Funds Based Lending) rate has not changed. The SBI’s one-year MCLR is 9%. All of the rates will be effective from April 15, 2025, i.e., today.
The crash in the rates has occurred due to the RBI’s cutdown of repo rates by 0.25% in the most recent MPC meeting, which was conducted on April 09, 2025. This is the second time the repo rate has been cut down, marking the present repo rate at 6%. As the repo rate is considered the external benchmark in India, the deduction in this rate has lowered the interest rate paid by the customers.
As the EBLR is linked to the repo rate, the fluctuation in the repo rate can directly affect the EMI. When there is no change in the repo rate, the EMI payouts of borrowers stay the same. While the reduction in repo rate can increase or decrease the amount of EMIs paid by borrowers who have their loans linked to the RBI’s repo rate.
