The Reserve Bank of India (RBI) cut the repo rate by 25 basis points (0.25%) at its MPC meeting on December 5, 2025. The repo rate now stands at 5.25%. This is the fourth reduction this year, bringing the total reduction to 1.25%. Following the repo rate reduction, several banks, including Punjab National Bank and Bank of Baroda, have offered their customers a gift by making loans cheaper.
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If you’re considering a loan, this news is a welcome relief. The Reserve Bank of India’s (RBI) announcement of a 0.25 percent repo rate cut is now showing its impact. Following the RBI’s repo rate reduction, many banks have reduced their interest rates.
The RBI recently cut the repo rate significantly to 5.25%, prompting several banks, including Punjab National Bank and Bank of Baroda, to reduce their loan rates.
PNB has reduced its repo-linked lending rate (RLLR) from 8.35% to 8.10%. The new rates include a 10 basis point increase in the basic service price (BSP). However, the bank’s marginal cost of lending rate (MCLR) and base rate remain unchanged. The new interest rates are effective from December 6, 2025.
Public sector Bank of Baroda has reduced its lending rates. The bank said the Baroda Repo Based Lending Rate (BRLLR) has been reduced from 8.15 percent to 7.90 percent. These new rates are effective from December 6, 2025.
Indian Bank has reduced its repo-linked benchmark lending rate (RBLR) from 8.20% to 7.95%. The bank also cut its marginal cost of funds-based lending rate (MCLR) by 5 basis points. The new rates are effective December 6.
Bank of India has reduced its repo rate-linked lending rate (RBLR) by 0.25%, from 8.35% to 8.10%, effective December 5th.
Private sector Karur Vysya Bank has reduced its MCLR by 0.10 per cent from 9.55 per cent to 9.45 per cent, with the new rates coming into effect from December 7.
Public sector bank Bank of Maharashtra (BOM) announced a 0.25 percent reduction in interest rates on home, car, education, and other RLLR-linked products on December 7. The bank stated that after the rate cut, home loan interest rates start at 7.10 percent, while car loan interest rates are 7.45 percent. The new rates are effective from December 6.
