Lending rates to fall by 30 bps after RBI policy rate cut

Lending rates are expected to fall by around 30 basis points (bps) following the recent policy rate cut, according to a report by the State Bank of India (SBI).

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The report highlighted that the immediate impact will be seen on loans linked to the external benchmark lending rate (EBLR), which make up about 60 per cent of the loan book of All Scheduled Commercial Banks (ASCBs).

SBI said "The steep cut on policy rates is expected to pass on to the EBLR linked loan book immediately with ASCB share of 60 per cent. Thus immediate impact on average lending rate could be around 30".

The report said the sharp policy rate cut will quickly pass through to the EBLR-linked loans, lowering borrowing costs for many customers.