SBI loan costs rise after 25bp lending-rate increase

State Bank of India raised its external benchmark-linked lending rate by 25 basis points to 8.15% on Oct. 19, increasing the benchmark used for some floating-rate loans.

The bank’s rate update showed the 8.15% EBLR excludes the credit risk premium and bank spread. Those add-ons can lift the final rate paid by borrowers above the published benchmark, depending on the loan and customer profile.

SBI passes through RBI hike

The change follows the central bank’s repo-rate increase, extending monetary-policy transmission into retail and small-business borrowing costs. A basis point is one-hundredth of a percentage point, so the SBI move equals a 0.25 percentage-point increase.

For borrowers with loans linked to the EBLR, the practical effect is likely to come through higher equated monthly installments or a longer repayment period, depending on contract terms. The bank’s update did not give a separate estimate of the rupee increase for a typical home, auto or personal loan.

The wider rates signal is that public-sector lenders are continuing to adjust loan benchmarks after the central bank’s policy move. If other banks match SBI’s increase, credit costs across India’s banking sector would rise through the same benchmark-linked loan channel.

The dated check is Oct. 19 and the following banking days, when borrowers can review bank notices and loan-account updates to see how the revised benchmark is applied.