SBI cuts base rate by 25 bps

Existing home loan customers will now see a reduction in their EMI equated monthly installment after almost three years.

SBI chairman Pratip Chaudhuri had on Monday indicated that the bank might reduce interest rates. Transmission of monetary policy to surely take place. Definitely,on interest rates there is a downward bias which is very supportive of growth, he said. The cut in CRR will unlock Rs 2,500 crore for SBI and there will be savings to the tune of Rs 200 crore. SBI last changed its base rate in August 2011 when it hiked the rate by 50 bps.

In August,SBI slashed lending rates on car and home loans by up to 0.5 per cent,a day after a 1 per cent cut in SLR by the RBI in the first quarter review. It recently slashed deposit rates as well to maintain its interest margin.