Loan figures are likely to drop by 30 basis points after lowering the policy rate: SBI

New -delhi, June 7 (IANS). According to a new SBI report, the loan figures are expected to fall about 30 basis points (BPS) after the recent reduction of policy rates. Statistics compiled by the State Bank of India (SBI) research said this change will only be felt in loans related to the external criterion (EBLR), which is approximately 60 percent of all loans given by planned commercial banks (ASCB). The report said that the impact of policy rate cuts, due to these high interests of loans associated with EBLR, will be passed quickly, making the loan cheaper loan cheaper. “The move aims to reduce the cost of loans and promote the demand in the economy,” the report states. However, the decline in debt rates can cause damage to the profit margin of banks. To help reduce this pressure, the Reserve Bank of India (RBI) has also reduced the CRR Restree Restation (CRR), which will reduce the cost of funds for banks. Although CRR cuts may not change the deposits or loan rates directly, SBI said it could help banks improve their net rent margin (NIM) by 3 to 5 BPS. In addition, the report states that CRR cuts can improve the liquidity in banking systems. This is expected to reduce the amount of base money and increase the money multiplier by 20 to 30 bps, which could promote better credit flow in the economy. Meanwhile, banks have already begun reducing fixed deposits (FD). Since February 2025, the FD tariffs have dropped by 30 to 70 BPS, and SBI hopes the trend will remain in the coming months. Furthermore, SBI warned that although low lenders favored borrowers, banks may experience their profit margin. According to the report, “its exact impact will be on another bank by bank, but there is a possibility of a decrease in the margin as a whole.” Finally, the report states that any change in monetary policy depends on how the economy is performing. Although the scope for further reductions in tariffs is limited, the transfer of large scale to the government from RBI has improved the government’s financial situation. Currently, SBI expects no further change in policy rates in the next term. -Ians gkt/