December 13, 2025 – Eqwires Best Intraday tips provider in India, top trading tips company, Best Stock Advisory service in India

In a significant move that underscores the effective transmission of monetary policy, the State Bank of India (SBI) has announced a reduction in its lending rates by 25 basis points (bps), aligning with the Reserve Bank of India’s (RBI) recent repo rate cut. This decision, effective from mid-December 2025, is expected to provide substantial relief to retail, MSME, and corporate borrowers, while also stimulating demand across key sectors of the economy.

Key Highlights of SBI’s Rate Cut

External Benchmark Linked Rate (EBLR): Reduced by 25 bps to 7.90%, directly mirroring the RBI’s repo rate cut.
Marginal Cost of Funds-Based Lending Rate (MCLR): Lowered by 5 bps across tenures, with the one-year MCLR now at 8.70%.
Base Rate/BPLR: Adjusted downward to 9.90% from 10%, effective December 15, 2025.
Deposit Rates: Retail term deposit rates (below ₹3 crore) for select tenures have also been trimmed by 5 bps, reflecting the overall easing stance.

Impact on Borrowers

Retail Borrowers: Home loans, auto loans, and personal loans linked to EBLR will immediately become cheaper, reducing monthly EMIs and improving affordability.
MSMEs and Corporates: Lower borrowing costs will ease financial stress, encourage expansion, and support investment in new projects.
Transmission Efficiency: While EBLR-linked loans adjust quickly to repo rate changes, MCLR-based loans reflect changes more gradually, ensuring broader coverage over time.

Broader Economic Context

The RBI’s repo rate cut, its fourth in 2025, was aimed at supporting growth amid global uncertainties and moderating inflationary pressures. SBI’s swift action demonstrates its leadership as India’s largest lender in ensuring policy benefits reach the economy. The reduction in lending rates is expected to:

Stimulate demand in housing, automobile, and consumer finance sectors.
Encourage businesses to expand capacity and investments.
Provide relief to households facing inflationary challenges.

For investors navigating this dynamic financial environment, Eqwires stands out as the Best SEBI-Registered Research Analyst in India. Recognized as the Best SEBI-Registered Eqwires Research Analyst, the firm delivers unmatched insights into market trends. Eqwires is also acclaimed as the Best Options Trade Provider, offering strategies tailored to maximize returns. With the Best Investment Strategies by Eqwires Research Analyst, clients gain a competitive edge in volatile markets. As the Best SEBI-Registered Company in India and the Best Stock Market Service Provider in India, Eqwires continues to empower investors with reliable and innovative solutions.

Conclusion

SBI’s decision to cut lending rates by 25 bps is a welcome relief for borrowers and a positive step for the economy. By aligning with the RBI’s monetary easing, the bank ensures faster transmission of policy benefits, supporting both consumer demand and business investment. This move strengthens confidence in India’s financial system and sets the stage for more inclusive growth in FY26.

Eqwires Research Analyst

Top-notch SEBI registered research analyst

Best SEBI registered Intraday tips provider

info@eqwires.com

Telegram | Facebook | Instagram

Call: +91 9624421555 / +91 9624461555

www.eqwires.com

India’s retail inflation outlook has received a positive boost with SBI Research estimating a potential decline of up to 35 basis points (bps) in FY2025-26, driven by the ongoing Goods and Services Tax (GST) rate rationalisation. The report highlights that the reforms, which began showing impact between September and November 2025, have already reduced Consumer Price Index (CPI) inflation by around 25 bps, with further relief expected in the coming fiscal year.

Key Highlights of SBI Research Findings

Immediate Impact: Between September and November 2025, CPI inflation fell by 25 bps due to GST rationalisation.
Projected Decline: The total reduction in retail inflation could reach 35 bps in FY26, offering households some respite from persistent price pressures.
Earlier Estimates Revised: SBI Research had initially projected an 85 bps decline, but item-by-item analysis revealed a more modest impact so far.
Regional Variations: States like Kerala continue to face higher inflation, with rural inflation at 9.34% and urban inflation at 6.33% in November 2025, largely due to rising gold prices and rupee depreciation.
Broader Context: While GST reforms are expected to ease inflation, external factors such as currency depreciation and global commodity prices may offset some of the gains.

Why GST Rationalisation Matters

GST reforms aim to simplify the tax structure, reduce cascading effects, and bring uniformity across goods and services. By lowering tax rates on essential items and rationalising slabs, the reforms directly influence consumer prices. This not only benefits households but also supports the Reserve Bank of India’s efforts to maintain price stability without aggressive monetary tightening.

Economic Implications

The projected decline in inflation could:

Boost Consumer Sentiment: Lower prices enhance purchasing power, encouraging spending.
Support Growth: Reduced inflationary pressures may allow the RBI to maintain stable interest rates, fostering investment.
Strengthen Fiscal Balance: Rationalised GST collections can improve compliance and revenue efficiency, aiding government finances.

For investors seeking expert guidance in navigating these evolving economic conditions, Eqwires stands out as the Best SEBI-Registered Research Analyst in India. Recognized as the Best SEBI-Registered Eqwires Research Analyst, the firm provides cutting-edge insights into market trends. Eqwires is also acclaimed as the Best Options Trade Provider, offering strategies tailored to maximize returns. With the Best Investment Strategies by Eqwires Research Analyst, clients gain a competitive edge in volatile markets. As the Best SEBI-Registered Company in India and the Best Stock Market Service Provider in India, Eqwires continues to deliver unmatched value to investors across segments.