View the most recent lending rates offered by SBI for March 2025: Base rate and MCLR

The State Bank of India (SBI), the country’s largest lender, has released its revised marginal cost of funds-based lending rates (MCLR), which will take effect from March 15, 2025, and remain valid until April 15, 2025. These updated rates are crucial because they directly influence the interest rates on various SBI loans, including home loans, auto loans, education loans, and personal loans — affecting both existing borrowers and new customers.

The overnight and one-month MCLR rates remain steady at 8.20%, providing stability for short-term loans. The three-month MCLR stands unchanged at 8.55%, while the six-month MCLR remains at 8.90%. The widely tracked one-year MCLR, which serves as the benchmark for most retail loans like home loans and auto loans, stays at 9.00%. Meanwhile, the two-year MCLR is fixed at 9.05%, and the three-year MCLR continues at 9.10%.

SBI’s base rate, which is an older benchmark used for loans sanctioned before MCLR was introduced, has been set at 10.40%, effective March 15, 2025. Additionally, the bank’s External Benchmark Lending Rate (EBLR) — which links lending rates to external factors like the RBI’s policy rates — is pegged at 8.90% plus the Credit Risk Premium (CRP), effective from February 15, 2025.

Several other major banks, including HDFC Bank, Bank of Baroda, Punjab National Bank (PNB), Canara Bank, and IDBI Bank, have also reviewed and adjusted their MCLR rates. HDFC Bank and Canara Bank, in particular, have reduced rates on select tenures to attract borrowers in the competitive loan market, while Bank of Baroda and PNB have chosen to hold rates steady to maintain stability amidst market fluctuations.

Understanding SBI’s External Benchmark Lending Rate (EBLR)

Introduced on October 1, 2019, the EBLR ensures transparency in the way banks price their loans. Unlike MCLR, which is based on a bank’s internal cost of funds, the EBLR is directly tied to an external financial benchmark. For SBI, this benchmark is the Reserve Bank of India’s (RBI) Repo Rate — currently set at 6.25% — to which SBI adds a spread of 2.65%, resulting in an effective rate of 8.90%.

The benefit of this structure is that any change in the RBI’s repo rate immediately impacts borrowers. If the RBI raises the repo rate to control inflation, SBI’s floating-rate home loans and other EBLR-linked loans will become more expensive. Conversely, if the RBI reduces the repo rate to boost economic growth, borrowers may enjoy lower EMIs, making loans more affordable.

Impact on Existing and New Borrowers

For existing borrowers whose loans are linked to MCLR, the unchanged rates offer stability. However, borrowers on floating-rate loans tied to EBLR or repo rates should remain prepared for fluctuations based on RBI’s monetary policy decisions. New borrowers, on the other hand, may benefit from comparing MCLR-based loans with EBLR-linked options to choose the most cost-effective solution for their financial needs.

SBI’s consistent one-year MCLR rate at 9.00% reflects the bank’s balanced approach — keeping loan rates competitive while managing its own funding costs. This rate is especially significant for home loan borrowers, as many of SBI’s home loan products are directly tied to the one-year MCLR.

The Broader Banking Landscape

India’s banking sector has been witnessing a tug-of-war between rising funding costs and the demand for affordable credit. With inflation concerns easing slightly and global financial markets stabilizing, banks are navigating a delicate balance between maintaining profitability and offering competitive loan rates. The RBI’s decision on repo rates in upcoming monetary policy meetings will play a pivotal role in shaping the trajectory of lending rates across the country.

In summary, SBI’s latest MCLR revision provides borrowers with a clearer picture of where their loan rates stand for the next month. While stability prevails for now, those with EBLR-linked loans must stay watchful of RBI rate changes that could influence their repayment burden. As competition among banks intensifies, customers may find attractive loan offers, particularly in the housing, automobile, and personal loan segments — making it essential to stay informed and compare rates before making financial commitments.