Following the Reserve Bank of India's (RBI) decision to cut the repo rate by 50 basis points on June 6, several banks in India have begun lowering their lending rates. This move aims to stimulate credit demand and boost economic activity. Banks are passing on the benefits of cheaper funds from the RBI to their customers.
The revision in lending rates will primarily benefit existing borrowers with floating-rate loans, reducing their home loan and personal loan EMIs. The RBI has reduced the repo rate by a total of 100 basis points since February 2025.
Public sector lenders have been quick to respond. Bank of Baroda lowered its Repo-Linked Lending Rate (RLLR) from 8.65% to 8.15%. Punjab National Bank and Bank of India reduced their RLLRs from 8.85% to 8.35%. Indian Bank revised its RLLR from 8.7% to 8.2%, and UCO Bank reduced its RLLR from 8.8% to 8.3%, along with a 10 basis points cut in its Marginal Cost of Funds Based Lending Rate (MCLR) across all tenures.