Cheaper retail loans from SBI, bank cuts SBAR

State Bank of India (SBI) has reduced its benchmark rate State Bank Advance Rate (SBAR) by 0.25 per cent, from 12.75 per cent to 12.50 per cent, with effect from February 16, 2008.

The reduction may mean cheaper retail loans for borrowers.

SBI is charging 2.75 per cent below SBAR for five-year floating loans, 2.5 per cent below SBAR for 10-15 year floating rate loans and 2.25 per cent below SBAR for 15-20 year loans. Loans above Rs 20 lakh are 25 basis points higher than the SBAR.

Other public-sector banks like Canara Bank and Allahabad Bank and Punjab National Bank Housing Finance (PNB Housing Finance) have kept the PLR unchanged and decreased the interest rates on retail loans like home and education loans.

But, housing finance company HDFC (like SBI) reduced its Retail Prime Lending Rate (RPLR) by 0.25 per cent effective February 1.