RBI Cuts Repo Rate: Another bold initiative toward reviving the economy was taken by the Reserve Bank of India (RBI) in cutting the repo rate by 25 basis points (0.25%), the second consecutive cut this year, providing relief for all borrowers nationwide.
Following the decision, four major public-sector banks: State Bank of India (SBI), Punjab National Bank (PNB), Indian Bank, and Bank of India, immediately hastened to reduce their lending rates, thereby making loans cheaper for millions.
Repo Rate Cuts – How Will They Benefit Borrowers?
Borrowers with floating-rate loans are feeling immediate relief. Most retail loans today are pegged to the RBI’s repo rate, and banks revise their interest rates based on the repo rate cut by the RBI; as a result, EMIs go lower. Be it a housing loan, an auto loan, or a personal loan, this means lower borrowing costs for the borrower and more cash in the borrower’s hands.
All About RLLR: The Real Game-Changer for Lower Loan Rates
RLLR (Repo-Linked Lending Rate) forms the basis on which banks set interest rates that are dispensed to borrowers. The RBI established RLLR in October 2019, dictating that all retail loans are attached to an external benchmark: the Repo rate. Such transparency ensures that any cuts undertaken by the RBI will be passed on to consumers directly and expeditiously.
Latest Updates About Public Sector Lending Rates
The following are the revised lending rates of some of the leading public sector banks:
State Bank of India (SBI):
The largest bank of the country will reduce its External Benchmark-Linked Lending Rate (EBLR) to 8.65% effective from April 15, 2025, from the earlier 8.90%.
Punjab National Bank (PNB):
RLLR of PNB has been cut to 8.65% from 8.90%. The spread of the bank remains unchanged at 0.20%, bringing down the final lending rate from 9.10% to 8.85%.
Indian Bank:
The bank has revised its Repo-Based Lending Rate (RBLR) from 9.05% to 8.70%, valid from April 11, 2025, until further notice.
Bank of India:
The cut in RBLR effective from April 9, 2025, benefits clients with an RBLR of 8.85% from the earlier 9.10%.