After the RBI cut the repo rate, major banks like Bank of Baroda, HDFC Bank, Punjab National Bank and UCO Bank have reduced their interest rates by up to 50 basis points. This reduction will reduce the EMI of home, auto and personal loans. Bank of Baroda has reduced the repo rate linked loan by 50 basis points.
Reduced Interest Rates: Banks have also started giving the benefit of the reduction in repo rate by RBI to the customers. Now four public and private sector banks have announced a reduction of up to 50 basis points in their interest rates. After this reduction, the way has been cleared for reduction in the monthly installment (EMI) of various loans like home, auto and personal.
Public sector Bank of Baroda (BOB) has announced a reduction of 50 basis points in the interest of loans linked to repo rate. After this reduction, the bank’s repo-based interest rate (RRLR) has become 8.15 percent. BOB has given the full benefit of RBI’s repo rate reduction to its customers.
Banks cut interest rates
At the same time, private sector HDFC Bank has cut the Marginal Cost of Fund-Based Lending Rate (MCLR) by 10 basis points. After a cut, the bank’s interest rate on one month loan has come down to 8.90 percent. Similarly, the interest rate on three-month loan has come down to 8.95 percent and on six-month and one-year loan to 9.05 percent. The interest rate on two and three-year loan has come down from 9.20 percent to 9.10 percent.
BOB gave relief to customers
The reduction in interest rates of Bank of Baroda and HDFC Bank has become effective from June 7. According to IANS, public sector Punjab National Bank (PNB) has reduced the interest rates on its repo-based loans by 50 basis points. After this reduction, the RRLR of banks has come down from 8.85 percent to 8.35 percent.
However, the bank has kept its base rate and marginal cost of lending rate (MCLR) unchanged. UCO Bank has taken a different path and has reduced the MCLR by 10 basis points on loans of all tenures. After this reduction, UCO Bank’s one-month MCLR has come down to 8.35 percent, three-month loan to 8.5 percent, six-month and one-year loan interest rates have come down to 8.8 percent and nine percent.
The reduction in interest rates of PNB, Bank of India and UCO Bank will be effective from June 10. Earlier, Bank of India had reduced RRLR by 50 basis points from 8.85 percent to 8.35 percent.
RBI had reduced the repo rate by 50 basis points
RBI had cut the repo rate by 50 basis points last week. After this cut, the repo rate has come down to 5.50 percent. So far in 2025, RBI has cut the repo rate by 100 basis points or one percent in three times.
In the last meeting, RBI has announced a cut of 100 basis points or one percent in the cash reserve ratio (CRR). This move will increase the availability of cash with banks. The repo rate is the rate at which RBI lends to commercial banks.
