Indian Banks Announce Lending Rate Cut For Borrowers After RBI Policy Cut

Following the Reserve Bank of India’s (RBI) latest rate cut, at least five major public sector banks have reduced their lending rates, offering immediate relief to retail and MSME borrowers. The rate revisions came soon after the announcement of the RBI’s decision on Wednesday, April 9, to slash the repo rate by 25 basis points to 6 per cent, aiming to stimulate credit and support economic growth.

This also marked a second consecutive rate cut in the year 2025. RBI also changed its policy stance to “accommodative”.

“Uncertainty in itself dampens growth by affecting investment and spending decisions of businesses and households,” Malhotra said, during monetary policy. “Second, the dent in global growth due to trade friction will impede domestic growth. Third, higher tariffs shall have a negative impact on our exports,” he added.

Bank of Baroda on April 10 announced a cut in its external benchmark-linked lending rates across retail and MSME segments, effective immediately. The bank’s overnight marginal cost of funds-based lending rate (MCLR) now stands at 8.15 per cent, with the One-Year MCLR set at 9 per cent. This positions the bank among the more competitive lenders in the market.

“This move reaffirms Bank of Baroda’s commitment to providing credit at affordable rates to individuals and businesses,” the bank said in a statement. “Supporting broader economic growth and financial inclusion remains our focus.”

Additionally, other banks, including Punjab National Bank (PNB), Bank of India, Indian Bank, and UCO Bank, all of which issued regulatory filings announcing repo-linked rate reductions.

Punjab National Bank (PNB) also announced a 25-basis-point cut in its Repo-Linked Lending Rate (RLLR), effective April 10, 2025. PNB’s RLLR will reduce from 9.10 per cent to 8.85 per cent, the Bank announced in an exchange filing. PNB asserted that its Marginal Cost of Funds Based Lending Rate (MCLR) and Base Rate will remain steady. This means that borrowers linked with RLLR will only get lower EMIs.

Chennai-headquartered Indian Bank will reduce its Repo-Linked Benchmark Lending Rate (RBLR) by 35 basis points to 8.70 per cent, effective April 11. PNB has revised its RBLR from 9.10 per cent to 8.85 per cent, effective April 10.

Bank of India has also lowered its RBLR to 8.85 per cent, down from 9.10 per cent, with the new rate taking effect Wednesday. UCO Bank announced a cut to 8.80 per cent, applicable from Thursday.