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Lending Rates to Fall by 30 bps: SBI Report According to the latest report by the State Bank of India (SBI) , lending rates are expected to decline by 30 basis points (bps) following the RBI's recent policy rate cut . The reduction in the repo rate by 50 bps to 5.5% and the 100 bps CRR cut to 3% is anticipated to have a swift and visible impact on loans linked to the External Benchmark Lending Rate (EBLR) . Notably, EBLR-linked loans constitute about 60% of the total loan book of All Scheduled Commercial Banks (ASCBs) . The report states, "The steep cut on policy rates is expected to pass on to the EBLR-linked loan book immediately, with ASCBs' share of 60 per cent. Thus, the immediate impact on the average lending rate could be around 30 bps." Impact on Borrowing Costs and Bank Margins The SBI report explains that this rate cut will lower borrowing costs for retail and corporate customers , thereby stimulating credit demand . However, it also warns of a po...

 

SBI Predicts Another RBI Rate Cut by April If Inflation Remains Favourable The State Bank of India (SBI) has projected that the Reserve Bank of India (RBI) may announce another rate cut as early as April 2025 , provided inflation continues to move in a favourable direction. This statement aligns with the RBI’s commitment to long-term price stability and sustained economic growth . According to SBI Research , the Monetary Policy Committee (MPC) has been closely monitoring inflation trends, especially food inflation , which remains a key concern. Despite positive indicators such as strong kharif production and easing vegetable prices , risks from adverse weather conditions persist. RBI’s Inflation Forecast and Policy Outlook 📉 The RBI has retained its FY25 inflation forecast at 4.8% , with Q4 inflation projected at 4.4% . 📉 For FY26, Consumer Price Index (CPI) inflation is estimated at 4.2% , signaling optimism for price stability. The MPC recently lowered the repo rate by 25 bas...